China’s Economic Growth Potential Enhanced by Pro-Market Reforms, Says IMF
In a recent speech at the China Development Forum, the Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, highlighted the significant benefits that China could experience with the implementation of pro-market reforms. Georgieva emphasized that by embracing comprehensive pro-market reforms, China has the potential to achieve accelerated economic growth, exceeding the current status quo scenario.
According to Georgieva, the adoption of pro-market reforms could result in a remarkable 20% expansion of the real economy over the next 15 years. This growth projection equates to adding a substantial $3.5 trillion to the Chinese economy. The IMF Managing Director urged China to take decisive actions to address challenges in the property sector, enhance sustainability, reduce debt risks, and focus on boosting domestic consumption.
Georgieva specifically recommended steps such as reducing the stock of unfinished housing and creating room for market-based corrections in the property sector to strengthen consumer and investor confidence. Premier Li Qiang also expressed intentions to optimize property policies to address sector challenges effectively.
In addition to reforms in the property sector, Georgieva emphasized the importance of enhancing domestic consumption by increasing incomes, empowering families’ spending capacity, and expanding social security systems responsibly. She highlighted the need for China to establish a robust artificial intelligence (AI) regulatory framework, leveraging the country’s leadership in AI preparedness among emerging economies.
Furthermore, Georgieva encouraged China to capitalize on its potential in advancing the green economy by selling more electricity at market prices for efficient decarbonization. She recommended expanding the emissions trading system (ETS) beyond the power sector to include industries such as cement and aluminum by 2025.
Overall, the IMF Managing Director’s remarks underscored the significant growth opportunities that await China through pro-market reforms and strategic economic initiatives. By embracing these reforms, China could unlock its full economic potential and drive sustainable growth in the years ahead.
