China has an important role to play in the recovery of the economy from the Covid-19 pandemic, but its growth is visibly slowing down, highlighted on Monday (6) the IMF (International Monetary Fund).
IMF Managing Director Kristalina Georgieva held a remote meeting with Chinese Prime Minister Li Keqiang and discussed topics ranging from inflation to pandemic recovery, according to a statement from the Fund.
“China has achieved a truly important recovery, but its growth momentum has visibly slowed down,” Georgieva said.
“As China is a vital engine of global growth, taking firm steps to support high-quality growth will help not just China, but the world,” he added.
In October, the IMF lowered its forecasts for China’s growth due to an accelerated retreat in public spending, forecasting an 8% expansion this year and a 5.6% growth in 2022.
While the 2021 numbers are Beijing’s highest growth rate since 2011, analysts warn that China faces a weakness in its real estate sector, as well as rising coal prices and a shortage of components.
Georgieva added that Beijing has made “important contributions” to expanding access to vaccines so that it can meet the goal of immunizing 40% of the world’s population against Covid-19 by the end of the year and 70% by the middle of next year.
Given the continuation of trade disputes between Washington and Beijing, the managing director of the IMF also called for “cooperation to reduce trade tensions and strengthen the multilateral trading system”, considering it “an essential engine of growth and employment”.
The IMF is pressing the G20, a group of the richest countries on the planet, including China, to expand and improve its debt relief initiative, and warned last week that many countries face a serious crisis without this help.
The G20’s Debt Service Suspension Initiative (DSSI) expires at the end of the year, and Georgieva welcomed the “ongoing commitment to China” in the group’s common framework, which remains a part of the relief.
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