China faces a crucial juncture, according to the International Monetary Fund (IMF), where it must either rely on past policies or embrace a new era of high-quality growth. The IMF suggests that a consumer-centered approach could significantly boost China's economy, adding $3.5 trillion over the next 15 years.
To achieve this, China must address unfinished housing projects and reduce local government debt risks. The IMF emphasizes the importance of increasing domestic consumption by enhancing individuals' and families' spending power.
Other economists have also advocated for a new growth model to address imbalances in household spending and investment returns. The IMF's remarks are particularly significant as they come at the start of a meeting where China aims to bolster foreign investor confidence.
Foreign investment flows into China have declined, and officials are actively seeking to attract investors. Apple CEO Tim Cook expressed optimism about China's openness and potential.
Over 100 overseas executives and investors attended the China Development Forum, where they engaged in discussions with Chinese officials. China's cabinet has announced measures to attract investment, including expanded market access and support for science and technology.
Premier Li Qiang emphasized the government's commitment to a $140-billion ultra-long bond plan to stimulate investment and stabilize growth. Officials also highlighted President Xi Jinping's focus on investing in "new productive forces" such as electric vehicles and drug development.