International Monetary Fund chief Kristalina Georgieva said that the Chinese government has to make important choices that will affect the economic growth prospects.
"China can remain committed to the policies that worked in the past, or update its policies for a new era of high-quality growth. Thanks to a comprehensive package of pro-market reforms, China's GDP could grow much faster than under the old policy," Georgieva said.
"These reforms can contribute to a 20% expansion of the real economy over the next 15 years. In the current environment, this is like adding $3.5 trillion to the Chinese economy," she said, adding that factors such as low productivity growth and an aging population are obstacles to the country's economic growth, but in the medium term, China will continue to make a key contribution to global economic growth.
Georgieva said that first of all, the Chinese government should focus its efforts on transitioning the property sector to a more sustainable footing and reducing local government debt risks.
"China will need to take decisive steps to complete the construction of unfinished housing, which has stopped due to bankrupt developers, and reduce the risks associated with the debt of the local government. In this way, the government could accelerate the resolution of the current problems of the real estate sector and increase consumer and investor confidence," Georgieva said.