IMF Warns China on Reforms and Credit Control

China needs to make a “decisive push” to launch new market-oriented reforms and has to control rapid credit growth that could lead to financial problems, the International Monetary Fund said Wednesday.

The fund trimmed its growth forecast for China this year from 8 percent to 7.75 percent due to weaker global demand but said the Chinese economy should remain robust.

President Xi Jinping and other leaders who took power in November have promised to make China’s economy more productive but have yet to disclose details. The World Bank and other advisers say Beijing urgently needs to curb the dominance of state companies and promote free-market competition or growth will decline sharply.

In meetings with visiting IMF officials, Chinese leaders emphasized their desire to nurture “more balanced, inclusive” growth, said David Lipton, a deputy IMF managing director.

“They need continued liberalization and reduced government involvement (in the economy), allowing a greater role for market forces,” Lipton told reporters.

via Mainichi

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