The year signaling a new booming period

The world economy is showing definite signs of recovering growth. The International Monetary Fund has revised up its forecast for global growth in 2018 to 3.7 percent. In China, however, there is a debate on whether the country's economy has entered a new booming period of growth. Market watchers, with a bit anxiety, are waiting for the annual Economic Work Conference to set the tone for the government's take on the economy next year.

The anxiety is unwarranted if one takes a look at some of the key economic indicators. As a measure to stop capital flight following the devaluation of the yuan since August 2015, the government started a rather strong stimulus package in the first quarter of 2016. Its impacts were immediate. Local governments increased their investment in infrastructure; the housing market recovered (although later it was stabilized by the government); commodity prices regained much of the losses they had incurred in the previous several years; and industrial profitability improved.

Moreover, what has happened in China has had a significant spillover effect on the global economy - global recovery benefited from China's faster growth, which in turn has stimulated China's own growth. One of the brighter signs is that after two years' decline, exports began to grow again in 2017.