China told it faces ‘fork in the road’ as officials meet CEOs By Reuters

[ad_1]

4/4

© Reuters. Reporters watch a video clip showing Chinese Premier Li Qiang speaking at the opening ceremony of the China Development Forum (CDF) 2024, in Beijing, China March 24, 2024. REUTERS/Jing Xu

2/4

By Colleen Howe and Jing Xu

BEIJING (Reuters) – China needs to “reset” its economic policies to ease the crisis in the stock market and boost domestic consumption and productivity, said Kristalina Georgieva, Managing Director of the International Monetary Fund.

“China is facing a fork in the road – to rely on the policies that have worked in the past, or to start a new era of high growth,” Georgieva said in a speech at a meeting of senior Chinese officials and international business leaders. .

Officials who spoke at the opening of the China Development Forum expressed confidence that China will achieve its economic goals, including growth of about 5% this year, and pledged to support companies in key sectors, areas that Chinese President Xi Jinping called “new”. creative power.”

But these developments left behind the broader reforms that the IMF had advocated. Georgieva said the IMF’s analysis shows a mix of consumer-oriented policies could add $3.5 trillion to China’s economy over the next 15 years. If successful, this boost would be equivalent to adding output equivalent to doubling South Korea’s economic growth.

In order to do so, China must take “resolute” steps to complete the construction of unfinished buildings by the bankers and reduce the risks of public debt, the IMF chief said.

“The key to high growth should be greater reliance on domestic food,” said Georgieva, a Bulgarian economist. “Achieving this depends on increasing the financial strength of individuals and families.”

Some economists have also advocated a new growth strategy for China. But the IMF’s comments were important to come early in the two-day meeting as Beijing seeks to push a message that China is open for business.

Foreign investment in China fell nearly 20% in the first two months of the year, data released Friday showed, and officials have been scrambling to attract investors at a time when many companies have been looking to “de-risk” supply chains. and work away from China.

In 2023, China’s foreign investment contracted by 8%, which shows the stability of the economy and the tension with the United States and its allies on several issues.

Apple (NASDAQ: ) CEO Tim Cook, chief executive at the Beijing event, told Chinese reporter CGTN that he had a “successful” meeting with Chinese Premier Li Qiang.

“I think China is opening up,” Cook told a CGTN interviewer on the sidelines of the conference. He later said that Chinese suppliers have helped bring benefits to sustainable manufacturing, including reducing water use and recycling metals such as aluminum and cobalt.

Stephen von Schuckmann, a board member and executive at ZF Group in charge of the auto supplier’s battery operations, said the company is committed to China, which is the world leader in sales and production of electric vehicles.

“Any comments and jokes about exiting the retail sector are not what we follow,” he said in a statement published by CGTN. “We’ve had money. We’ve come to stay.”

More than 100 foreign executives and investors attended the China Development Forum as well as closed sessions with Chinese officials on Friday and Saturday.

China’s cabinet last week unveiled measures to win investment, including expanding market access and programs to encourage investment in science and technology.

On Sunday, Li said China’s previously announced $140 billion plan to issue long-term bonds would create a fund to support investment and stabilize growth.

Other officials pointed to Xi’s commitment to driving investment in “new energy production,” industries that officials say include electric cars, aerospace and advanced medical technology.

[ad_2]

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *