The International Monetary Fund (IMF) has warned today (Wed. July 25, 2012) that the Chinese economic growth rate is softly declining however it may face the repercussions of the Eurozone debt crisis.
A soft decline means a dwindling of growth rates after periods of high spikes which could not be sustained over the long term at acceptable level.
The IMF report on the Chinese economic situation stated that the largest country in the world in terms of its population figures shall witness a moderate economic growth rate this year estimated at 8% of its GNP which seems too high when compared with anywhere in the world.
At a time of Eurozone recession, poor economic performance of American economy, China becomes locomotive which pulls global economic growth.
The IMF pointed out the Chinese economic current sluggishness is the result of Beijing's plan aimed at lowering growth rates to more sustainable levels and reducing inflation down to 3.5%, according to IMF estimates.
The report also pointed out that the Eurozone debt crisis might constitute hazards for the horizons of Chinese economy.
Local risks which threaten the Chinese economy, according to the IMF, include real estate sector, banking system and balancing of local government budgets in China.
The IMF renewed its call to China to transform its economy from reliance upon exports and investments to reliance up local demand which leads to sustainability of better living standards as well as more balanced growth and sustainability.