IMF's Georgieva says China should boost domestic demand, shift toward services

International Monetary Fund managing Kristalina Georgieva said on Thursday that China needs to boost domestic demand and shift more of its economy toward services to reduce problems caused by excess manufacturing capacity in certain sectors.

Georgieva told an Atlantic Council event in Washington that China could boost its economic output by 20% in the coming years if it follows the IMF's reform advice.

"We recognize there have been sectors in the Chinese economy over the years where overcapacity has existed," Georgieva said. "It is critical to develop domestic demand and then shift more of the economy towards services, so this doesn't persist as a problem for China."