China Needs To Accelerate Reforms To Drive Economic Growth, World Bank Chief Urges

China will need to accelerate reforms and not rely solely on monetary and fiscal policy to drive economic growth, the World Bank’s Managing Director Sri Mulyani Indrawati told Reuters in an interview on Tuesday, Reuters reports.

“I would recommend not really relying more on their macro policy, specifically on the monetary and fiscal side, because it’s been done before, especially post the global financial crisis,” Indrawati said, according to Reuters.

“It is now time for really deepening and doing the reforms in a much faster way,” Indrawati said, according to Reuters.

The comments from Indrawati come ahead of the Asia-Pacific Economic Cooperation (APAC) conference of finance ministers which will be in Beijing on Tuesday and Wednesday.

Earlier on Tuesday, China reported that third quarter economic growth decreased to 7.3%, beating a market estimate of 7.2% and down from 7.5% growth seen in the second quarter of this year.  China’s third quarter economic growth was the slowest rate since the 2008-2009 global financial crisis, which threatens the nation from missing its official annual growth target of 7.5% in 2014.  This would be the first time in 15 years that China falls short of reaching its growth target, which will add further concerns to an already unstable global market that China will start to drag on global growth.

Over the weekend, a report from The Conference Board said that economic growth in China will slow sharply over the approaching decade to 3.9% as its productivity plunges and government leaders fail to push through difficult reform measures to revamp their economy.

The Conference Board forecasts that annual economic growth in China will slow to an average of 5.5% between 2015 and 2019, compared to economic growth of 7.7% in 2013, and will fall further to an average of 3.9% between 2020 and 2025.

Sources: Reuters, The Conference Board