China needs greater social spending, more progressive tax system: IMF
Executive Board Article IV Consultation concludes China should reduce national savings
The IMF released their summary of the 2017 Article IV Consultation with China on Tuesday, broadly commending authorities’ progress rebalancing the economy, noting that economic activity has firmed, opening a window to accelerate reforms.
- Reduce national savings to prevent domestic and internal imbalances; China needs greater social spending, more progressive tax system
- State-owned enterprises need further reforms, including hardening budget constraints, accelerating restructuring of debt, allowing exit of non-viable firms
- Gradual tightening of monetary policy should core inflation continue upward trend
- Continued progress toward greater exchange rate flexibility of the yuan