BEIJING, March 25 – China will remain a key contributor to global economic growth of more than 3 percent this year and next, and there are tremendous opportunities in the world’s second-largest economy, Kristalina Georgieva, managing director of the IMF, said on Sunday at a symposium during the China Development Forum 2024 (CDF).
The CDF has drawn more than 110 foreign guests including leaders from the World Bank and IMF, corporate executives and scholars. It has become an important platform for pushing external economic exchanges and promoting cooperation between Chinese and foreign enterprises.
Georgieva said that the IMF saw a strong post-COVID economic rebound in 2023 in China, with growth exceeding 5 percent.
With a comprehensive package of pro-market reforms, China could grow considerably faster than a status quo scenario.
“This additional growth would amount to a 20 percent expansion of the real economy over the next 15 years. In today’s terms, that is like adding $3.5 trillion to the Chinese economy,” Georgieva said.
Reforms should start with sound macroeconomic fundamentals. According to Georgieva, decades of impressive growth in China have significantly improved living standards and provided ample policy buffers to address the most pressing near-term challenges.
These include transitioning the property sector to a more sustainable footing and reducing local government debt risks.
“Our analysis shows that decisive steps to reduce the stock of unfinished housing and give more space for market-based corrections in the property sector could accelerate the solution to the current property sector problems and lift consumer and investor confidence,” Georgieva said.
A key feature of high-quality growth will be higher reliance on domestic consumption by boosting shoppers’ spending power. Higher labor productivity and income growth are also significant.
This is particularly important as China seeks to seize the opportunities of the artificial intelligence (AI) “big bang,” she said.
“Our analysis finds that China is at the forefront of emerging economies in terms of AI preparedness, with well-developed digital infrastructure providing a head start.
Establishing a robust AI regulatory framework and strengthening economic ties with other innovative countries will help China power ahead,” Georgieva said.
