IMF wants China to review trade restrictions for global economy

As a key growth driver, China should review its trade and investment restrictions for improving the global economy, a senior International Monetary Fund (IMF) official said on Monday.

"China should be open to look at its own restrictions on trade and investment, which have generated criticism from some trading partners," IMF's First Deputy Managing Director David Lipton said at the Asian Financial Forum.

According to IMF, China alone contributes to a third of the global growth.

As a trading partner to over 100 countries across the world that represent 80 per cent of the global Gross Domestic Product (GDP), the ChineseAsuccess story is linked to the world's growth, Lipton said.

"China plays an increasingly important role in development aid and infrastructure finance, as epitomised by the Belt and Road Initiative.

"In terms of its global role, China has been a voice of reason in the debate over trade and economic integration," he said.

The Belt and Road Initiative, unveiled by the Chinese government in 2013, plans to build trade and infrastructure networks connecting Asia with Europe and Africa along the ancient Silk Road routes.

With an important role in globalisation, the country should look at its own "shortcomings" with respect to trade policies, remarked Lipton.

"It means protecting intellectual property rights, reducing distortions of industrial policy, overcapacity and policies that favour state enterprises," he said.

Better globalisation is in China's own interest, he said, adding that the Chinese government and its lenders, considering the benefits of debt resolution, would ensure that the developing world does not face a new debt crisis.

"China needs to be alert to the discontent with globalisation as it is currently configured and support a global economic order for the future that will be widely embraced," he said.

With growing Foreign Direct Investments in China, the country should ensure the investments are commercially viable, Lipton said.

"China also needs to take account of the impact from investments on governance, capacity building, sustainable development and environmental protection."

(Bhavana Akella is in Hong Kong at the invitation of Hong Kong Trade Development Council. She can be contacted at bhavana.a@ians.in)

--IANS

bha/vd