IMF chief lauds China’s efforts to rebalance economy
19 Mar 2012
Praising China's efforts to rebalance its economy, International Monetary Fund (IMF) managing director Christine Lagarde said yesterday that the "highest levels" of the nation's leadership appeared to support needed efforts to keep the world's biggest growth engine humming in coming years.
However in an interview with The Wall Street Journal Lagarde made no comment on whether China's efforts would change the IMF's mind about China's currency, which the IMF had declared undervalued.
Her comments underscore a debate between western policy makers who argue that China kept its currency low to enjoy a trade advantage, while Chinese officials cite trade data that, according to them, said China was making progress towards rebalancing its economy to rely more on domestic consumption and less on exports.
"Re-engineering of the growth model is being advocated at the highest levels of government - and this is highly desirable," Lagarde said in the interview.
She added in the interview, that China's slowing economy was a "special concern." China has lowered its growth target of 7.5 per cent this year against 8 per cent in past years, partly reflecting the problems in major export markets such as the EU and the US, but also as part of its effort to focus on what officials said would be lower but higher-quality growth.
Actual growth would be higher than the conservative target but was widely seen as falling below last year's 9.2 per cent.
On a broader level, Lagarde said she saw hopeful signs that the world economy was stabilising despite continued risks, including a slowdown in emerging-market economies.
