IMF MANAGING DIRECTOR SAYS CHINA CAN NO LONGER RELY ON EXPORTS – Georgieva says China’s growth could fall below 4% if it stays on its current path
International Monetary Fund Managing Director Kristalina Georgieva said that China is too large to continue relying on exports to drive its economy and faces dangerously slower growth unless it shifts toward a consumer-driven economic model.
Georgieva told reporters in an interview that China’s growth could fall below 4% in the medium term if it stays on its current path, a level “that is going to be very difficult for China. It’s going to be very difficult from a social standpoint.”
Speaking ahead of IMF and World Bank annual meetings in Washington, where growing trade tensions over a major flood of Chinese exports will be a topic, Georgieva said IMF research shows that China could grow at a significantly higher pace if it makes changes to give its consumers the confidence to spend more.
Beijing can no longer “rely on some miracle that would retain an export-led model in this large economy as a viable vehicle,” she added. Georgieva said that China’s recent announcement of fiscal stimulus plans were “in the right direction,” with the aim of reviving consumer confidence shattered by a years-long real estate crisis.
