China is too big to continue to rely on exports to drive its economy, and faces dangerously slower growth unless it shifts to a consumer-driven economic model. This was stated by the managing director of the International Monetary Fund, Kristalina Georgieva, to Reuters, also quoted by BTA.
She told the agency that China’s growth could fall below 4% in the medium term if it continues on the same path.
Georgieva was speaking ahead of the IMF and World Bank annual meetings in Washington, where growing trade tensions over a major flood of Chinese exports will be a hot topic.
According to Georgieva, an IMF study shows that China can grow at significantly higher rates if it makes changes and gives its consumers the confidence to spend more.
Asked about recent comments by a US Treasury official that the IMF was “too polite” when it came to pressuring China on industrial policy and currency policy, Georgieva disagreed.
She said the IMF has long called for subsidy reforms in China and the need to put state-owned enterprises and private companies on an equal footing.