China stands at critical juncture to unlock growth – IMF head

China stands at a critical juncture, as IMF Managing Director Kristalina Georgieva emphasised the need to choose between traditional policies or “pro-market reforms” to unlock growth, according to the Financial Times report on Sunday.

At Beijing’s China Development Forum, Georgieva highlighted global economic resilience but warned of weak growth due to low productivity and high debt. She urged China to opt for “high-quality growth” through comprehensive pro-market reforms, potentially adding $3.5 trillion to its economy over the next 15 years.

China’s Premier Li Qiang pledged regulatory reforms to facilitate foreign market access and boost domestic consumption, aiming to expand domestic demand and modernise industries.

Amid oversupply risks in key sectors, Beijing aims for 5 per cent growth, focusing on manufacturing and infrastructure investment, while calls mount to stimulate domestic demand.

Georgieva echoed President Xi Jinping’s vision of “high-quality growth,” proposing pro-market reforms to add $3.5 trillion to China’s economy over 15 years. Suggestions included addressing the real estate crisis, strengthening the pension system, and ensuring fair competition between private and state-owned enterprises.

She further emphasised investing in human capital and healthcare for higher productivity and incomes. Globally, while macroeconomic fundamentals remain strong, fiscal authorities face challenges in balancing debt reduction and financing digital and green transformations.