China’s near-term growth outlook has improved due to recent policy support but the country needs to rein in fast credit growth to ensure economic transition on a sustainable footing, the International Monetary Fund (IMF) has said.
The Chinese economy is expected to grow 6.6 per cent this year, with the inflation rate rising to 2 per cent, the IMF said in a report on Friday after concluding its annual economic health check on the Chinese economy, the People’s Daily reported.
"We have a positive view of China’s growth outlook as China continues to mobilise its very considerable resources and catches up with higher-income economies," said James Daniel, IMF mission chief for China.
"Many countries could only dream of achieving growth rates that China has and is likely to achieve, which also reflects positively on the reforms that Chinese policymakers have undertaken," the People’s Daily quoted Daniel as saying.
The IMF expected that China’s economic transition will continue and will be positive overall for the global economy.
The report also noted that the Chinese yuan was broadly in line with fundamentals, and welcomed Beijing’s steps toward an effectively floating exchange rate region.
According to the report, Chinese authorities agreed that China’s corporate debt has risen excessively.
But they pointed out that China’s large pool of domestic savings, ample banking system buffers, and ongoing equity market development would facilitate a smooth adjustment.
Chinese authorities expected growth to remain in the range of 6 to 7 per cent, which was sustainable considering the potential for restructuring, upgrading and convergence in less developed regions, the People’s Daily said citing the report.