IMF Chief Economist: Proper Deceleration Will Help China Run A Good Growth "Marathon".

In an interview with Xinhua News Agency on the eve of the IMF and World Bank annual meeting, Blanchard said that IMF expects China to maintain 7%-8%'s economic growth at this stage.

With the pformation of growth mode from investment drive to consumption drive, China's economy can accept a 6% growth rate in the medium term.

"It's like a marathon.

If we run at a speed of 10% per year, we will create a series of problems, such as environmental pollution and urban resource shortage, so we must speed down, "he said.

He stressed that even 6% of the economic growth is a good performance on a global scale.

In the latest issue of the world economic outlook, IMF predicts that the growth rate of China's economy will be 7.4% and 7.1% in the next two years, which is consistent with the forecast in July.

Blanchard said that the reason for maintaining the growth rate of China's economy is mainly due to the controllable risk of China's real estate and shadow banking.

He believes that China's housing prices will decline, but will not bring financial and financial risks.

Because the leverage ratio of Chinese family mortgage loans is relatively low, even if house prices fall, it will not bankrupt financial institutions and families.

Shadow banking will bring some problems to China's financial system, but if necessary, the banking system can still provide sufficient resources.

Once there are problems, the Chinese government is also strong enough to help.

However, Blanchard still pointed out that China has a long way to go in its economic restructuring.

As the proportion of trade surplus in China's economy continues to decline, China's dependence on exports is weakening, but the recent rise in investment may hamper the process of structural adjustment.

In the latest world economic outlook report, IMF will also reduce world economic growth forecasts to 3.3% and 3.8% in the next two years.

The report points out that some countries are still digesting the subsequent financial crisis, including high debt and high unemployment. At the same time, both the developed economies and the emerging economies are facing a potential decline in growth rate, and some advanced economies may still stagnate.

Most economies still need to maintain growth as a top priority.

It is pointed out that the impact of the financial crisis is even more serious than that of the Great Depression of the last century, and it will take longer for the world economy to recover.

He predicted that world economic output would not return to normal until 2016.

He said that monetary policy is not a magic bullet to stimulate growth, but should be only part of the overall solution. Raising labour productivity is the fundamental way to increase output.

Global, he said.

The situation has changed considerably compared with the crisis.

The US household savings rate has increased, the federal budget deficit has declined, China's trade surplus has declined, and the economic structural imbalance between China and the United States has not been completely reversed, but it has also been greatly corrected.

This is the few developed economies that were raised by IMF's economic growth expectations.

Blanchard said the US economy is heading for a full recovery.

He said that if the Fed felt that the economy had reached the level of potential output, it would naturally start raising interest rates.

After raising interest rates, the money will return to the us from some emerging markets, so the days of emerging markets will not be too good.

However, he stressed: "the main problem is the slow growth of potential growth, and many countries are unable to achieve easy growth."