The International Monetary Fund plans to tell China to boost weak domestic consumption, address its troubled real estate sector and rein in local government debt, problems that are dragging down both Chinese and global growth, IMF Managing Director Kristalina Georgieva said.
Georgieva said in an exclusive interview the messages will be delivered to Chinese authorities in a forthcoming IMF "Article IV" review of China's economic policies. The IMF will strongly urge Beijing to shift its growth model away from debt-fueled infrastructure investment and real estate, she said.
"Our advice to China is use your policy space in a way that helps you shift your growth model towards more domestic consumption," Georgieva said. "Because the traditional way of infrastructure, pumping in more money, in this current environment is not going to be productive."