BEIJING, June 5-- The Chinese economy is growing steadily, but there is a long list of economic and financial reforms to be completed without delay, a senior official with the International Monetary Fund (IMF) has said.
The Chinese economy continues to grow at a "healthy rate," and the IMF predicts that it will expand by around 7.5 percent in 2014 from the previous year, David Lipton, first deputy managing director of the Washington-based organization, said on Thursday in Beijing.
The latest growth rate projection was in line with the estimate in the IMF's flagship World Economic Outlook report released in April.
"China needs good growth," Lipton said during an exclusive interview with Xinhua, adding that China should aim for fast but sustainable growth.
Growth quality is key to the world's second-largest economy, and the market doesn't need to worry about a temporary growth slowdown in China, he said on the sidelines of the IMF's 2014 Article IV Consultation with China.
The Article IV Consultation is an annual economic and financial check-up held between the IMF and its member countries.
The Chinese authorities have done "many good things" and taken the "right kinds of steps" on economic and financial reforms including curbing the rise of shadow banking, coping with financial sector risk, slowing the spike of total social financing (TSF), and managing local government financing vehicles, according to Lipton.
The aggregate of China's TSF, a broad measure of liquidity in the economy, declined to 7.18 trillion yuan (about 1.16 trillion U.S. dollars) in the first four months of 2014, 746.4 billion yuan less than the same period last year, Chinese official figures showed.
Lipton believes Chinese local government financing vehicles must be used to fund local economic growth "in a way that ensures that resources are being used wisely and the right projects get done." He commended China's recent efforts to give local governments autonomy to issue bonds directly in a bid to better monitor local government debts.
Rapid growth of TSF and local government debts were both cited as major challenges facing China in the IMF's Article IV Consultation with China last year.
"If economic activities that might be risky are reined in and contained a little, you may see slightly slower growth, but you will have the benefit of lower probability of instability," Lipton explained.
In his view, important reforms yet to be completed in China include liberalizing the deposit interest rate, making the exchange rate more flexible, building a deposit insurance scheme, fiscal reform, rebalancing economic growth, environmental protection, and improving the economic governance and institutional base.
The process of implementing China's landmark economic reform agenda should go forward. "There is no reason to slow it. There is no reason to delay," said Lipton. He advised against letting the pace of reforms be affected by the possibility of them having a negligible effect on the growth rate.