China's Crossroads: IMF's Call for Economic Shift

IMF Managing Director Kristalina Georgieva has urged China to shift from its export-led economy model to a consumer-driven approach, warning of slower future growth. The call comes amid international criticism over China's trade practices. Georgieva suggests fiscal reforms, investment in key sectors, and social safety nets to stimulate domestic demand.

Kristalina Georgieva, Managing Director of the International Monetary Fund, has warned that China's future economic growth depends on transitioning from an export-driven model to one that prioritizes consumer spending. Speaking to Reuters, she highlighted the risk of growth dropping below 4% if no changes are made.

Ahead of crucial IMF and World Bank annual meetings, Georgieva noted the increasing global tensions regarding China's export surge. She emphasized that China must instill consumer confidence to achieve higher growth and acknowledged that its economy is at a 'fork in the road.'

Georgieva praised China's fiscal stimulus efforts but stressed the need for deeper reforms. These include developing a social safety net, investing in healthcare and education, and aligning state-owned enterprises with private firms. She refuted claims that the IMF is 'too polite' on China's industrial policy, asserting the Fund's consistent call for equitable reforms.

(With inputs from agencies.)