Beijing, The IMF on Wednesday pegged the growth of the Chinese economy at a slightly slower pace of 6.6 per cent in 2018, followed by a gradual slow down over the next five years.
An IMF mission, led by its Asia and Pacific Assistant Director James Daniel, was in Beijing and southern business-hub Shenzhen from May 17 to 30 and presented the results of an annual report on the Chinese economy, known as Article IV, in a press conference on Wednesday.
“China’s economic growth accelerated in 2017 and is expected to weaken only slightly in 2018 to 6.6 per cent and moderate gradually to about 5.5 per cent by 2023,” the team said in a press release cited by Efe news.
The IMF mission met representatives of the government, the People’s Bank of China (China’s central bank), private companies and educational institutions to exchange views about China’s economic growth outlook, progress of reforms and challenges facing the country.
They said that the Chinese economy was performing well and the reforms were making good progress.
“Reforms progressed in several key areas: financial sector de-risking accelerated with a wide range of decisive measures adopted, credit growth slowed, overcapacity reduction progressed, anti-pollution efforts intensified and opening up continued,” said the press release.
The team also praised the government for shifting the policy focus from “high-speed to high-quality growth” adding that the earlier high growth rates were unsustainable and advocated a shift from excessive investment to consumption, which could ensure a cleaner environment and reduce risks.
The IMF also urged the Chinese authorities to allow market forces to play a decisive role in the economy, reduce the power of the public sector and ensure just competition.
Referring to recent trade disputes between China and the US, the mission said trade tensions could be harmful both by the direct impact of tariffs and due to uncertainty affecting the confidence of investors and consumers.
The IMF also supported Beijing’s Belt and Road Initiative for its potential to improve connectivity and eliminate trade barriers, although adding that resources should be appropriately distributed among the countries involved.
