IMF says appropriate for China to shift economic model for high-quality development

WASHINGTON, March 8 (Xinhua) -- CHINA's economic growth target for this year will allow policy makers to focus on improving the quality of growth, an International Monetary Fund (IMF) spokesman said Thursday.

In the government work report delivered Tuesday at the opening of the second session of the 13th National People's Congress (NPC), CHINA's top legislature, Beijing sets the 2019 gross domestic product (GDP) growth target at 6-6.5 percent.

Meanwhile, the world's second-largest economy, which registered a 6.6-percent expansion in 2018, also pledges to continue pursuing high-quality development.

Speaking at a press briefing, Gerry Rice, director of the IMF's communications department, said it is "an appropriate step" that CHINA shifts its economic model and focuses more on the quality of development.

The resetting of the growth target, added Rice, will also help avoid creating too much debt.

In January, the multilateral lender lowered its global economic growth projections for 2019 and 2020, but maintained CHINA's GDP growth forecast at 6.2 percent for the two years.

Commenting on the government work report, the spokesman said the IMF welcomes CHINA's focus on maintaining macroeconomic and financial sector stability while controlling leverage.

As one of the highlights of the report, CHINA will reduce the tax burdens and social insurance contributions of enterprises by nearly 2 trillion yuan (about 298 billion U.S. dollars) this year.

The country also plans to cut the current value-added tax (VAT) rate of 16 percent for manufacturing and other industries to 13 percent, and lower the rate for such industries as transportation and construction from 10 percent to 9 percent.

When asked how the IMF views the massive tax and fee cuts, Rice said that his organization welcomes CHINA's intention to support consumption, which remains relatively low in the country.

The IMF sees the cuts in the social security contribution rate as a "positive step" because a high rate penalizes employment, he added.

In addition, the IMF also encourages CHINA to adopt other measures to accompany these reforms in order to ensure that overall fiscal policy supports consumption, he said.