In its consultation discussions with the People’s Republic of China authorities. the IMF executive board have found that although progress in external rebalancing has been substantial, domestic imbalances remain large.
In year 2012 fixed capital formation grew further as a percentage of GDP while domestic consumption was mainly unchanged.
IMF executive board noted that China's economy has challenges domestically in the
financial,fiscal and real state sectors. And potential external risks coming from the economic developments
in the Euro area,the U.S. and the economy of more advanced economies.
The IMF underscored and agreed to the transition shift to a more consumption-led for China's economic growth.
At the same time they agreed to the reform of the financial system, more market-based, which would help improve the allocation of capital, boost household income, and prevent a further increase of risks. "Emphasizing that financial sector liberalization should progress at the appropriate pace and sequencing, they considered as pressing priorities further deregulation of interest rates, greater use of market-based instruments in monetary management, and enhanced prudential oversight, including over the activities of non-banks".
The executive commitee recommends to use a fiscal stimulus,focused on consumption, if economic
growth slows down too sharply.
They also encourage the efforts to strengthen the governance and transparency of local government
finances.
In addition they welcome reforms in taxation,to make it more progressive and efficient, including a
value added tax.
Following the staff assessment that the renminbi remains moderately undervalued, the IMF board
reccomends a more market-based exchange system and restraint on foreign exchange intervention.
At the same time they encourage continued liberalization of the capital account.Opening markets further in the services and upstream industries.
And finally it supports plans to continue the upgrade of the statistical data.And hoped China will
eventually subscribe the Fund's Special Dissemination Standard.
In year 2012 fixed capital formation grew further as a percentage of GDP while domestic consumption was mainly unchanged.
IMF executive board noted that China's economy has challenges domestically in the
financial,fiscal and real state sectors. And potential external risks coming from the economic developments
in the Euro area,the U.S. and the economy of more advanced economies.
The IMF underscored and agreed to the transition shift to a more consumption-led for China's economic growth.
At the same time they agreed to the reform of the financial system, more market-based, which would help improve the allocation of capital, boost household income, and prevent a further increase of risks. "Emphasizing that financial sector liberalization should progress at the appropriate pace and sequencing, they considered as pressing priorities further deregulation of interest rates, greater use of market-based instruments in monetary management, and enhanced prudential oversight, including over the activities of non-banks".
The executive commitee recommends to use a fiscal stimulus,focused on consumption, if economic
growth slows down too sharply.
They also encourage the efforts to strengthen the governance and transparency of local government
finances.
In addition they welcome reforms in taxation,to make it more progressive and efficient, including a
value added tax.
Following the staff assessment that the renminbi remains moderately undervalued, the IMF board
reccomends a more market-based exchange system and restraint on foreign exchange intervention.
At the same time they encourage continued liberalization of the capital account.Opening markets further in the services and upstream industries.
And finally it supports plans to continue the upgrade of the statistical data.And hoped China will
eventually subscribe the Fund's Special Dissemination Standard.
