IMF calls for consumption-focused China stimulus

The IMF on Wednesday praised China’s efforts to stimulate its economy and said it believes Beijing has the capacity for a further stimulus program aimed at increasing domestic consumption, the Financial Times reported. The organization singled out health care, education and pension reforms as fiscal measures that would make people feel better about saving less and spending more. In moving away from its dependence on exports there would inevitably be job losses, the IMF added. However, "over a longer horizon, the employment gains from rebalancing towards domestic consumption and an increase in service sector employment should outweigh short-term losses," it said. The IMF’s economic assessment is supposed to take place annually, but Beijing had blocked it over fears that assessors would say the renminbi is unfairly undervalued. Separately, the WTO said China is likely to overtake Germany as the world’s largest exporter this year.