Photo: Courtesy of China Development Forum 2024

China will remain a key contributor to global economic growth of more than 3 percent this year and next, and there are tremendous opportunities in the world's second-largest economy, Kristalina Georgieva, managing director of the IMF, said on Sunday at a symposium during the China Development Forum 2024 (CDF).

The CDF, which is being held from Sunday to Monday in Beijing, has drawn more than 110 foreign guests including leaders from the World Bank and IMF, corporate executives and scholars. It has become an important platform for pushing external economic exchanges and promoting cooperation between Chinese and foreign enterprises.

Georgieva said that the IMF saw a strong post-COVID economic rebound in 2023 in China, with growth exceeding 5 percent.

With a comprehensive package of pro-market reforms, China could grow considerably faster than a status quo scenario. "This additional growth would amount to a 20 percent expansion of the real economy over the next 15 years. In today's terms, that is like adding $3.5 trillion to the Chinese economy," Georgieva said.

Reforms should start with sound macroeconomic fundamentals. According to Georgieva, decades of impressive growth in China have significantly improved living standards and provided ample policy buffers to address the most pressing near-term challenges. These include transitioning the property sector to a more sustainable footing and reducing local government debt risks.

"Our analysis shows that decisive steps to reduce the stock of unfinished housing and give more space for market-based corrections in the property sector could accelerate the solution to the current property sector problems and lift consumer and investor confidence," Georgieva said.

A key feature of high-quality growth will be higher reliance on domestic consumption by boosting shoppers' spending power. Higher labor productivity and income growth are also significant.

This is particularly important as China seeks to seize the opportunities of the artificial intelligence (AI) "big bang," she said.

"Our analysis finds that China is at the forefront of emerging economies in terms of AI preparedness, with well-developed digital infrastructure providing a head start. Establishing a robust AI regulatory framework and strengthening economic ties with other innovative countries will help China power ahead," Georgieva said.

Similarly, China has enormous potential in advancing the green economy. It is already the global leader in deploying renewable energy, and it is making rapid progress in green mobility. Its continued leadership is vital to addressing the global climate crisis, she noted.

"This transition from high-rate growth to high-quality growth is the right fork in the road to take, and China is determined to do so," Georgieva said, adding that the IMF is committed to being a partner, including through ongoing policy dialogue and mutual learning, while promising to work together to tackle global challenges such as economic fragmentation, climate change and debt.