INSUBCONTINENT EXCLUSIVE:
China's economy will grow slower than initially expected this year owing to a "stronger-than-anticipated" pullback in public spending, the
International Monetary Fund forecast Tuesday while warning that a weakening property market could bring a further blow.The eight percent
prediction in the IMF's latest World Economic Outlook report is down 0.1 percentage points from its July estimate as analysts warn China is
facing a painful fallout from real estate weakness and shocks from surging coal prices and shortages
But the figure is still China's strongest growth rate since 2011.The world's second-largest economy was the only major one to expand last
year after the coronavirus pandemic forced governments across the globe to lock down
The IMF also lowered its outlook for next year to 5.6 percent.Concerns over China have intensified in recent weeks as government curbs on
the property market piled pressure on overleveraged developers -- notably Evergrande. Measures by local governments to meet short-term
climate targets also led to a power crunch.On Tuesday, the IMF said: "China's prospects for 2021 are marked down slightly due to
stronger-than-anticipated scaling back of public investment."The downward adjustment is the IMF's second since April, when it pegged
full-year growth at 8.4 percent.It also warned of risks that could threaten the resilience of the recovery
"Large-scale disorderly corporate debt defaults or restructuring, for instance in China's property sector, could reverberate widely," it
said.The travails of Evergrande, which is struggling with more than $300 billion in liabilities, have thrown a spotlight on China's property
developers -- after Beijing introduced metrics to cap debt ratios last year.While analysts generally believe the firm's problems will not
trigger a "Lehman moment", many warn they will worsen a slowdown in the property sector, which accounts for a massive part of the Chinese
economy.The IMF added that an escalation of trade and technology tensions between the United States and China could "weigh on investment and
productivity growth, raising additional roadblocks in the recovery path".Should the world's two biggest economies decouple in basic
scientific research, there could also be "big negative effects" on global productivity, with an estimated decline of up to 0.8 percent to
start, it said.And in the longer term, demographic challenges in China and other emerging markets make it more pressing to reverse a
persistent decline in long-term growth and build a more buoyant post-pandemic global economy.Census results published in May this year
showed China's population growing at the slowest pace in decades, fuelling concerns of a demographic slump in the ageing country.Meanwhile,
the IMF expects monetary policy in China to be "moderately tight" in 2021, and for this trend to remain into next year.
