The chief of the International Monetary Fund (IMF) said he believed China would pursue economic policies that benefit both the country and the world.

 

Completing a one-day meeting with top Chinese officials, IMF Managing Director, Rodrigo Rato, said he shared the view with Chinese policymakers about the need to rebalance the growth pattern of the Chinese economy.

 

"Sustaining the rapid pace of growth is a challenging task, and we agree with the authorities that this requires rebalancing the economy away from its current heavy dependence on investment and exports and toward consumption," he said.

 

He made the remarks at a news conference after his meetings with Premier Wen Jiabao, central bank Governor Zhou Xiaochuan and Finance Minister Jin Renqing.

 

"It was clear to me in my discussions today that China's leaders have a clear understanding of the issues that they address," he said.

 

Rato said China's rebalancing endeavors form an integral part of the efforts that need to be made by all the major economies to ensure an effective resolution of the problem of global imbalances.

 

Rato said he was impressed and encouraged by the decisions made at the National Financial World Conference held earlier this month, which laid down plans for further market-oriented reforms in the financial sector.

 

He said China should allow monetary policy to play a bigger role in its management of the economy. In particular, a more flexible exchange rate of its currency will be helpful for the country's effort to rebalance the economy, he said.

 

He said a flexible exchange rate could also help the country tackle such problems as an overly large stockpile of foreign exchange reserves.

 

Related:

China Aims to Allow Greater Exchange Rate Flexibility over Time: IMF Chief

IMF Chief Calls for Public Spending to Help Boost China's Consumption

 

(China Daily January 27, 2007)