IMF says innovation and consumption are driving China's new economy
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Krishna Srinivasan, director of the Asia and Pacific Department at the International Monetary Fund, said in an interview with Xinhua Finance that China's shift toward a consumption-driven growth model supported by innovation could reinforce its medium-term growth trend and benefit the global economy. Srinivasan said China gives top priority to research and development, advanced manufacturing and innovation, with R&D spending second only to the United States and the most patent filings in the world. The 15th Five-Year Plan for National Economic and Social Development, covering 2026 to 2030, focuses on innovation, technological self-reliance and new quality productive forces. IMF research indicates that artificial intelligence technology could boost growth in emerging market economies by 0.2 to 0.8 percent, although the benefits remain uncertain and may be distributed unevenly. He stressed the need for policies to disseminate artificial intelligence technology, develop skills, adapt labor markets, protect social welfare and ensure AI governance, noting that this transition requires stronger social safety nets, structural reform of finance and fiscal policy, and adjustments to incentives that have long aimed at generating growth. On regional impact, data show that Asia accounts for about two-thirds of global economic growth, with China contributing about 30 percent, and the IMF expects that every 1 percentage point increase in China's growth will be associated with about a 0.3 percentage point increase in growth for other Asian countries over the medium term, especially those with strong trade links to China such as Vietnam and South Korea. The IMF also estimates that reducing non-tariff trade barriers in a legally binding form consistent with World Trade Organization principles would raise Asia's real gross domestic product by 1.8 percent over the medium to long term, with ASEAN economies benefiting especially. Srinivasan also spoke about the IMF's International Finance Research Center in Shanghai, the fund's only research center outside Washington, D.C., saying it focuses on studying emerging market and middle-income economies, not just China. Since it opened last December, the center has established a research steering committee and expanded its team of economists, research analysts and visiting scholars. The China-IMF Capacity Development Center based at the same site helps translate research into practice through capacity building and peer learning.