IMF: Lower debt, stronger banks key to China’s new growth model

The IMF Global Financial Stability Report (GFSR) directly addressed the “unprecedented but manageable challenges” China faces to move to “a new growth model and a more market-based financial system”.

The report said China faces a “delicate balance” of transiting to more consumption-driven growth without activity slowing too much, while reducing high debt levels through an orderly deleveraging, and moving towards a more market-based system.

It noted that, as the most important emerging market economy, China should take great care in how it manages this rebalancing and deleveraging process.

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