IMF head: China's high-quality growth depends on pro-market reforms
"China is determined to choose transition from high rates to high quality of growth, as its government recognizes that high-quality development ultimately depends on reforms", International Monetary Fund Managing Director Kristalina Georgieva said at China Development Forum 2024 in Beijing on March 24. In her speech, she highlighted that China is in a new era of high-quality growth and will continue to be a key contributor to global economic growth. She emphasized that international cooperation is essential to solve the challenges the world is facing.
Calibrating monetary and fiscal policies
On the global economy, she said that 2024 requires careful calibration of monetary and fiscal policies to secure a soft landing. Many central banks are facing the difficult task of deciding when to cut interest rates and by how much based. Fiscal authorities in most countries are also facing the challenges of embracing consolidation to reduce debt, rebuilding buffers and financing the digital and green transformations of their economies. She said that, compared with the past several years, the global economy has proven to be remarkable resilient. IMF projects over 3 percent growth for 2024 and the following year for the global economy. Looking to the medium term, IMF expects global growth to be around 3 percent. She said that low productivity growth and high debt levels are posing challenges to all, especially to emerging and developing economies. Meanwhile, geopolitical tensions are affecting trade and capital flows. Hopefully, the digital and green transformations will present opportunities to boost productivity and improve living standards. Deep structural reforms can enhance the conditions for entrepreneurship, innovation and economic performance.
At the forefront
On China's high-quality growth, IMF said that China could grow considerably faster with a comprehensive package of pro-market reforms starting with sound macroeconomic fundamentals, and the additional growth would add $3.5 trillion to the Chinese economy. The IMF head outlined that China has significantly improved its living standards and China's social security system covers more people than any other country on the planet.
On the artificial intelligence front, she said that China is at the forefront of emerging economies in terms of AI preparedness. China's well-developed digital infrastructure provides a head start.
In terms of advancing the green economy, she described China as a global leader in deploying renewable energy with enormous potential, adding that China was making rapid progress in green mobility.
"China's remarkable development success has delivered tremendous benefits to hundreds of millions of people," she said.
She praised China's decision to pursue high-quality development and China's continued support for IMF, expressing that the IMF was committed to work together with China to tackle global challenges via policy dialogue.
Prosperous future for all
"We have an outsized impact on the most vulnerable members of our global community," she said, highlighting the importance of international cooperation once more in her speech. Specifically, China has shown its remarkable leadership in making contributions to help strengthen the IMF's financial capacity in areas of IMF's concessional lending instrument for low-income countries, resilience and sustainability facility, the facility provides affordable long-term financing to countries undertaking reforms to reduce risks to prospective balance of payments stability, including those related to climate change and pandemic preparedness, and capacity-development initiatives.
"We also recognize China's important role in addressing debt distress in emerging and developing economies," she said.
Georgieva is confident that China and the world can tackle the challenges we are facing and can create a more prosperous future for all through cooperation.
China Development Forum 2024 is being held in Beijing under the theme of "The Continuous Development of China". International Monetary Fund Managing Director Kristalina Georgieva delivered her remarks on "Advancing China's Sustainable Economic Growth".
