New round of reforms needed for China's continued success: IMFListen /
China's economy is expected to expand at 7¾ percent this year—broadly the same pace as last year—but the risk of moderation has grown, say International Monetary Fund (IMF) economists.
In their annual report on China's economy, the economists emphasize the importance of reforms to secure more consumer-based and sustainable growth going forward.
The report says the resilience of China's economy since the 2008 financial crisis has provided a welcome boost to global demand, and substantial progress has been made in rebalancing China's external accounts.
But it warns that the pattern of economic activity in the world's second largest economy has become too reliant on investment and credit, resulting in rising domestic vulnerabilities in the financial sector, local government finances, and real estate.
According to the IMF, Chinese authorities have announced a broad range of reforms and policy objectives for 2013 that are intended to contain risks and rebalance growth, but the report says the priority now should be to devise specific action plans and implement them swiftly.
It adds that this will ensure a smooth continuation of the historic transformation of the past three decades in which bold reforms have helped China generate rapid growth and lift more than 500 million citizens out of poverty.
Donn Bobb, United Nations.