Business
16:13, 25-Jul-2017
China to remain key driver of global growth
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Strong Chinese growth will help the further recovery of the world economy as it drives growth in the Asian region but also throughout the world, according to Maurice Obstfeld, chief economist of the International Monetary Fund (IMF).
The IMF revised China's growth forecast for 2017 and 2018 up to 6.7 percent and 6.4 percent respectively, the IMF's economic counsellor and director of research told Xinhua News Agency on Monday.
This was partly based on a solid first quarter underpinned by previous policy easing and supply-side reforms, including efforts to reduce excess capacity in the industrial sector.
"We have seen very strong growth and especially beyond our update, (the) second quarter number of 6.9 percent is also above expectation. So clearly growth is proceeding at pace," said Obstfeld.
China is moving its economy from traditional manufacturing to the service and consumption-oriented sector, he noted, adding that its structural transformation and the rebalancing of its economy should lower the growth rate and put growth on a firmer basis over time.
Obstfeld expressed IMF concerns on China's credit-driven growth and some vulnerabilities in its financial systems that could derail growth, but also said the Chinese government had clearly recognized these issues and taken actions.
The recent strengthened coordination between the People's Bank of China and the State Council on financial oversight "is a big step forward" that will lead to more effective oversight of the financial markets, he said. In addition, China announced that it will set up a committee under the State Council to oversee financial stability and development during the recent National Financial Work Conference.
China's the Belt and Road Initiative was "very important", Obstfel meanwhile argued, as it promises not only a lot of useful infrastructure investment but to lower trade costs between very important parts of the world, promoting international trade and prosperity across the wide stretch of Eurasia.
Proposed by Chinese President Xi Jinping in 2013, the Belt and Road Initiative aims to build trade and infrastructure networks connecting Asia with Europe and Africa on and beyond the ancient Silk Road routes. It comprises the Silk Road Economic Belt and the 21st Century Maritime Silk Road.
(With inputs from Xinhua)
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