By David Lawder
WASHINGTON (Reuters) -International Monetary Fund Managing Director Kristalina Georgieva on Monday said the IMF has been vocal about its policy prescriptions for China to move away from an export-led growth model.
Asked at the Milken Institute Global conference in the Los Angeles area whether the IMF needed to get tougher on China as a result of U.S. Treasury Secretary Scott Bessent’s directive for the Fund to get back to its core economic stability mission, Georgieva said the Fund has been “doing exactly that.”
“For quite some time, we have been vocal that China has to deal with four problems that affect it domestically and affect it internationally. One, shift from export to more consumption. Two, fix the property sector,” she said, adding that Beijing also needed to embrace the services sector for growth and reduce the state’s role in the economy.
She acknowledged the Chinese state footprint was unlikely to shrink much in the near term.
During IMF and World Bank Spring Meetings last month, Bessent said that the two institutions needed to get back to their core economic stability and development missions after straying too far into climate, gender and equality issues.
He also called on the IMF to be a “brutal truth teller” and said it should “call out countries like China that have pursued globally distortive policies and opaque currency practices for many decades.”
Georgieva said that China would face deflationary pressures from a steep falloff of U.S. demand for its exports because of President Donald Trump’s tariffs, while Europe also would see less demand, which could moderate inflation. The U.S., meanwhile would face a supply shock that would add inflationary pressures, she added.
(Reporting by David Lawder; Editing by Chris Reese and Edward Tobin)
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