China must "reinvent itself" with economic policies to address its property market crisis swiftly and enhance domestic consumption and productivity, the International Monetary Fund's (IMF) Managing Director Kristalina Georgieva said on Sunday.
"China faces a fork in the road – rely on the policies that have worked in the past or reinvent itself for a new era of high-quality growth," Georgieva said in remarks to a meeting of senior Chinese officials and executives from global companies.
Officials who spoke at the opening of the China Development Forum expressed confidence China would hit its economic targets, including growth of about 5% this year, and pledged further support for companies in strategically important sectors, an area Chinese President Xi Jinping has dubbed "new productive forces."
However, those commitments continued despite the more sweeping changes urged by the IMF.
Georgieva said an analysis by the IMF showed a more consumer-centered policy mix could add $3.5 trillion to China's economy over the next 15 years. If achieved, that boost would be equivalent to adding output equivalent to more than twice the size of South Korea's economy.
The IMF chief said that China would need to take "decisive" steps to complete unfinished housing stranded by bankrupt developers and reduce risks from local government debt.
"A key feature of high-quality growth will need to be higher reliance on domestic consumption," Georgieva, a Bulgarian economist, said. "Doing so depends on boosting the spending power of individuals and families."
Other economists have also urged a new growth model for China. However, the IMF remarks were significant at the outset of a two-day meeting where Beijing was looking to push the message that China was open to business.
Foreign investment flows into China shrank nearly 20% in the first two months of the year, data released Friday showed, and officials have been stepping up efforts to attract investors at a time when many companies have been looking to "de-risk" supply chains and operations away from China.
In 2023, foreign direct investment into China contracted by 8%, reflecting a shaky economic recovery and tensions with the United States and its allies on a range of issues.
Apple CEO Tim Cook, the highest-profile executive at the Beijing event, told China state broadcaster CGTN he had an "outstanding" meeting with China's Premier Li Qiang.
"I think China is really opening up," Cook told a CGTN interviewer on the sidelines of the meeting. He later said Apple's China-based suppliers had helped deliver gains in more sustainable manufacturing, including lowering water use and recycling metals like aluminum and cobalt.
Stephen von Schuckmann, a board member and executive at ZF Group who oversees the auto supplier's battery-drive operations, said the company was committed to China, which leads the world in electric car sales and production.
"Any wording and hype about an exodus in the supply chain is not what we follow," he said in remarks published by CGTN. "We're invested. We're here to stay."
Over 100 overseas executives and investors attended the China Development Forum and a series of smaller closed-door sessions with Chinese officials on Friday and Saturday.
Last week, China's Cabinet unveiled steps intended to win investment, including expanded market access and pilot programs to encourage investment in science and technology.
On Sunday, Li said China's previously announced $140 billion plan to issue ultra-long bonds would create a fund to spur investment and stabilize growth.
Other officials highlighted Xi's commitment to driving investment in "new productive forces," industries that officials have said include networked electric vehicles, spaceflight, and cutting-edge drug development.