China faces ‘fork in the road,’ IMF chief says, urging Beijing to embark on pro-market reforms

China has two choices right now: return to its old economic policies, or choose reforms to spur growth, according to the International Monetary Fund's Managing Director Kristalina Georgieva.

"China is poised to face a fork in the road — rely on the policies that have worked in the past, or update its policies for a new era of high-quality growth," Georgieva said Sunday at the China Development Forum in Beijing.

"With a comprehensive package of pro-market reforms, China could grow considerably faster than a status quo scenario," she said, according to prepared remarks by the IMF.

This could unleash growth that would "amount to a 20% expansion of the real economy over the next 15 years — in today's terms, that is like adding US$3.5 trillion to the Chinese economy," she added.

While the country has seen a post-Covid rebound — with growth exceeding 5% in 2023 — it faces factors such as low productivity growth and an aging population, according to the Bulgarian economist.

Still, she added: "In the medium term, China will continue to be a key contributor to global economic growth."

At the this year's two-day China Development Forum, which started Sunday, Chinese officials are expecting more than 100 foreign participants, including CEOs of major overseas firms as well as leaders of the IMF and World Bank.

During a keynote speech at the forum, Chinese Premier Li Qiang pledged efforts to promote "high-quality development," "intensify macro-policy adjustments," and expand domestic demand, according to state media reports. He also vowed a "higher level of openness" while addressing challenges.

Separately, officials reportedly pledged further protection to foreign-funded firms as overseas investment flows to China dry up. 

The measures