China is urged by the Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, to overhaul its economic strategies in tackling the ongoing property market crisis and amplifying domestic consumption and productivity.
Speaking to a gathering of senior Chinese officials and global corporate executives on Sunday, Georgieva stressed the necessity for China to “reinvent itself” to navigate through a new era of high-quality growth.
“China faces a fork in the road to rely on the policies that have worked in the past, or reinvent itself for a new era of high-quality growth,” Georgieva emphasized, echoing the sentiment expressed at the China Development Forum’s opening session.
She underscored the need for China to embrace a more consumer-oriented approach, citing IMF analysis projecting a potential $3.5 trillion boost to China’s economy over the next 15 years with such policy reforms.
Despite expressing confidence in China’s ability to meet its economic targets, including a projected growth of about 5% for the current year, officials fell short of endorsing sweeping changes advocated by the IMF.
“A key feature of high-quality growth will need to be higher reliance on domestic consumption,” Georgieva reiterated, stressing the importance of enhancing individuals’ and families’ spending power to achieve this goal.
This push comes at a time when foreign investment in China has declined by nearly 20% in the first two months of the year, amid global trends of companies seeking to diversify their supply chains away from China.
In addressing these challenges, Chinese officials highlighted President Xi Jinping’s commitment to drive investment in “new productive forces,” encompassing industries such as networked electric vehicles, spaceflight, and advanced drug development.
