You might recall how China killed the release of the IMF report. Notice how China can get a report repressed, unlike most countries, or do they even try. The biggest news is how China is on track to be the world's largest economy.
Well, finally the IMF released the report.
What's frightening is how the IMF shows China's stimulus worked and then some. The difference between them and the United States? China has the jobs, they now have the world's manufacturing base.
Indeed, all of Asia (minus Japan) is experiencing a V Shaped Recovery:
ADB has upgraded its 2010 growth forecast for the 14 economies of emerging East Asia to an aggregate 8.1% from the 7.7% projected in ADB’s Asian Development Outlook 2010 published in April. The forecast for the region’s economic growth in 2011 remains at 7.2%.
The IMF is back to telling China to significantly revalue their currency. This is the elephant in the room China does not want mentioned.
Staff believe that the renminbi remains substantially below the level that is consistent with medium-term fundamentals.
Interestingly, the IMF has put China's objections in the text, instead of their own specifics. Still currency manipulation is a key finding from the IMF report.
A stronger currency. An appreciation of the real exchange rate needs to be a key component of the government’s medium-term strategy to rebalance toward higher private consumption. The current undervaluation is counterproductive and acts as a headwind to increasing private consumption.
Here are the IMF's three main points and we'll ignore the text of China's denials after them (read the Economist for a more sardonic take on China getting into the IMF report and censoring key findings):
- The pace of accumulation of international reserves continues to be rapid.
- The current level of the real exchange rate is close to the level it was at in the late 1990s even though, in the interim, China has had significantly higher productivity than its trading partners.
- China’s current account is set to return to a position of sizable surplus in the coming years.
The IMF projects China GDP for 2011, annual, to be 9.6%. 2010, 10.5%. Most telling are the trade numbers. with net exports surging from -0.5% to +0.6 percentage change.
Gross domestic investment? While the United States investment is negative, over in China land, gross domestic investment is 50% of GDP for 2010 and 49.2% of GDP for 2011. They invest in their country, and so do.....U.S. corporations.
The IMF report has numerous graphs and tables on China's economic health. I must say it looks like the U.S. used to look, before politicians gave our country away on a bribe. I'm sorry, but I am outraged at the never ending U.S. political sound byte stream of the trivial, when our economy has gone to the dogs, literally offshore outsourced to China, India and often due to corporate and foreign interests demands.