China has an important part to play in the global economy as it recovers from Covid-19, but its growth is slowing, IMF managing director Kristalina Georgieva said Monday.
The head of the Washington-based crisis lender held a virtual meeting with Chinese Premier Li Keqiang and discussed topics ranging from inflation to the recovery from the pandemic, according to a statement released by the IMF.
“China achieved a truly remarkable recovery, but its growth momentum has been slowing notably. As China is a vital engine for global growth, taking strong actions to support high-quality growth will help not only China, but the world,” Georgieva said.
In October, the IMF lowered its forecasts for China’s growth due to an accelerating pullback in public spending, predicting an 8% expansion this year and 5.6% growth in 2022.
While the 2021 figure is Beijing’s strongest rate of growth since 2011, analysts warn China is facing a painful fallout from real estate weakness and shocks from surging coal prices and shortages.
Georgieva added that Beijing had made “important contributions” to expanding vaccine access so the world can achieve the IMF’s goal of innoculating 40% of the population of each country against Covid-19 by the end of this year and 70% by the middle of next.
With China embroiled in an ongoing spat with the US, Georgieva said countries need “to cooperate to reduce trade tensions and strengthen the multilateral trading system, which is a key engine for growth and jobs.”
The IMF is pushing the G20 group of the world’s richest countries, including China, to extend and improve their debt relief initiative, warning last week that many countries face a dire crisis without the help.
The group’s Debt Service Suspension Initiative (DSSI) expires at the end of the year, and Georgieva said she “welcome continued engagement with China on” the G20’s Common Framework that continues some of the relief.