IMF: China helping with world economy recovery

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Christine Lagarde, the International Monetary Fund (IMF) Managing Director, said global economic recovery is already taking hold and that China is one of the driving forces, while participating in discussions with Chinese Premier Li Keqaing and other world financial leaders in Beijing earlier this week.

“At the moment, clearly the economy is speeding up, there is a momentum for this recovery, it seems to be fairly broad-based, and the demand addressed to China is likely to be up,” said Lagarde.

The 1+6 Roundtable discussion held in Beijing on Tuesday. /VCG Photo

The IMF has raised China's growth forecast for the third time in less than a year. Its latest consultation report with China revised China’s annual growth rate for the next three years to 6.4 percent up from 6.0 percent.

She said the IMF decides its forecast based on the combination of the global economy saturation and the policies of China.

VCG Photo

China's currency, the renminbi (RMB), joined the basket of currencies that determines the Special Drawing Right (SDR) this year.

“The joining was a very strong signal that the China’s economy was much more opened, more on its way to internationalization,” she said, “That has continued for the last 4 months and we have every reason to believe that will continue to be so.”

Lagarde also mentioned that it’s time to speed up China's economic reforms.

She suggested that the Chinese government should continue to boost and support consumption, make sure that the land prices are viable but not over-leveraged, and deal with zombie firms more decisively.

“Don’t use growth too much as a quantitive objective to decide policies, but focus on the quality and stability of growth,” said Lagarde.