25 Mar China economy at critical stage, says IMF
China’s economy is at a “fork in the road” where it must choose between past policies and “pro-market reforms” to unlock growth
the IMF managing director Kristalina Georgieva said
Global economy had shwon remarkable resilience to shocks but was headed fro growth that was “weak by historical standards” in the medium term as low productivity growth and high debt levels curbed progress
Li promised that Beijing would prepare regulations to smooth market access for foreign enterprises and efforts to boost domestic consumption.
The conference comes as China’s trading partners confront oversupply risks in industries including electric vehicles and steel, which could spur manufacturers to dump excess goods on markets
Beijing has set a growth target of 5% for this year, the same as in 2023 but low compared with previous years and analysts expect the economy to slow further in the medium term on the back of a property downturn and demographic decline. China has reponded by promising to invest more in manufacturing and infrastructure, but economists are calling for it to do more to stimulate domestic demand.
Gerogieva’s use of the term “high-quality growth” borrows from the rhetoric of Xi Jinping, who has urged Chinese industry to move up the value chain into more sophisticated tech and value-added industries.
She said that with a “comprehensive packaged of pro-makret reforms, China could add 20% or $3.5tn to its economy over the next 15 years. These would include reducing the stock of unfinished housing left over from its real estate crisis and “giving more space for market-based corre tions in the property sector”
Strengthening China’s pension system in a fiscally responsible way could help boost the spending power of individuals and families. Investments in human capital 0 in education, life-long training and reskilling – and quality healthcare will deliver higher labour productivity and higher incomes”
On the global economy, strong macroeconomic fundamentals in most of the advanced and emerging countries ahve helped weather shocks. But 2024 would be challenging for fiscal authorities in most countires. They need to embrace consolidation to reduce debt and rebuild buffers, and at the same time finance the digial and green transformation of their economies.
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