China needs to reduce its reliance on credit-fueled investment, and deal with rising corporate debt and other imbalances while those problems are still manageable, the International Monetary Fund urged Friday in its annual review of the world’s second-largest economy, The Wall Street Journal reports. The IMF said Beijing is relying excessively on credit to reach “unsustainably high growth targets.” The multilateral agency’s to-do list includes tackling corporate debt, reforming bloated state enterprises and strengthening the financial system to reduce distorting effects on China’s economic performance. The IMF cited growing risks of disorderly corporate defaults, protracted lower growth and a “hard landing” in regions suffering from industrial overcapacity if Beijing failed to act quickly to overhaul its economy.
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