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China needs to implement economic reforms as soon as possible - IMF

China needs to implement economic reforms as soon as possible - IMFChina needs to implement reforms with more urgency as the economy faces growing vulnerabilities and there are fewer buffers to deal with any shocks, an International Monetary Fund (IMF) official said on Tuesday.

"The near-term growth outlook has turned more buoyant due to recent policy support," David Lipton said, according to a copy of his prepared remarks provided to Reuters.

"The medium-term outlook, however, is more uncertain due to rapidly rising credit, structural excess capacity, and the increasingly large, opaque, and interconnected financial sector," Lipton, first deputy managing director of the IMF, said at the end of a visit to Beijing.

China's economy grew at its slowest pace in a quarter of a century last year, weighed down by weak demand at home and abroad, cooling investment and overcapacity, particularly in industries such as steel and coal.

Analysts say continued government efforts to stimulate activity and hit growth targets are driving up debt levels, raising concerns about dangers to the country's banking system, which has seen non-performing loans hit 11-year highs.

"Corporate debt, though still manageable, is high and rising fast," Lipton said, adding that China needed a comprehensive plan and concrete action - especially for state-owned enterprises - to avoid serious problems down the road.

The IMF expects China's economy to grow by around 6 percent in 2017. Beijing has set a goal of at least 6.5 percent growth over the next five years, though some analysts believe real growth levels are already much weaker than official data suggest.

Source: Reuters
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