Despite skeptics, IMF’s Lagarde upbeat on China economy  

IMF回應中國經濟超美：標準不同 對中國經濟有信心

國際貨幣基金組織(IMF)總裁拉加德9日在IMF與世界銀行2014年秋季會議上表示，中國的持續穩定發展有目共睹。她在回應“中國超美成第一經濟體”時表示，在評價經濟總量的標準上，仁者見仁，智者見智。[查看全文]

(ECNS) – Christine Lagarde, managing director of the International Monetary Fund (IMF), says she's confident in the Chinese economy, despite disagreement about the IMF's recent projections.

According to the IMF's latest World Economic Outlook, China's 2014 GDP will reach $17.6 trillion, surpassing the US's $17.4 trillion to be the world's largest.

The method IMF used is based on purchasing power parity (PPP), which takes into account exchange rates that adjust for price differences of the same goods in different countries.

The simple logic is that although a person in China earns much less than a person in the US, their purchasing power may not be too different as goods are typically cheaper in China.

Using the IMF's calculation, China's 2013 GDP was $16.1 trillion, while calculations by the World Bank yielded a result of $9 trillion.

The method has been questioned by a number of experts.

Shen Jiru, an analyst with the Chinese Academy of Social Sciences, said it's not accurate to compare the prices of two countries, as China and the US have quite different pricing systems. For example, dental care is relatively cheap in China compared to the US, while housing is known to be pricey in China.

In response to such questions at a meeting with the World Bank on Oct 9, Lagarde said she's confident in the future of the Chinese economy. She said the slowdown is a signal of a healthier development mode.

World Bank President Jim Yong Kim said China's fast growth was largely reliant on investment, but is becoming more consumption and service driven.

China's Deputy Minister of Finance Zhu Guangyao said at a forum held by Peterson Institute for International Economics, that China will keep working on improving its growth quality.