Economic conditions favor Chinese reforms: IMF official

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03:16

The International Monetary Fund's first deputy managing director has said that the global economic condition right now is favorable for China's reforms and opening-up drive.

David Lipton was speaking as the IMF wrapped up a consultation mission to China that reviewed the overall momentum of the country's economic overhaul.

“It is a good moment for China to grow more quickly since the global economy is adjusting some risks,” Lipton said.

His comments on China’s opening market indicated that more competition boosts domestic wages and spurs more productive and profitable companies.

It also creates more opportunities as a result of actions such as the removal of foreign equity limits and the lowering of import tariffs to attract foreign investors to the Chinese market. But there are still some concerns, the main one relating to how level the playing field is.

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“The foreign investors have been very interested in coming to China, and capital controls have not been a hindrance. What really matters is whether China welcomes investors, gives them enough room to maneuver so they can run their businesses profitably. As long as they feel as though they will be treated fairly, similarly to Chinese businesses, I think China will remain an attractive place,” said Lipton.

Another focus is on whether the US Fed will raise its interest rate and put pressure on the yuan currency. Lipton said this was a normal process as the US has long-time inflation, and the country has used low-interest rates to lift inflation back towards the desirable level which of two percent.

“There are always some risks, and it will be shifting in capital flows, shifting in exchange rates, but it is manageable for China,” he added.

(CGTN’s Xia Cheng contributed to the story.)