Cross-posted from: https://feddit.de/post/7871758
Looking ahead, Kristalina Georgieva, managing director of the IMF, identified demographic changes and a “loss of confidence” as long-term challenges for China. The country’s aging population and declining birth rate pose significant obstacles to future economic growth. Moreover, there is a need to restore confidence among the Chinese people to stimulate domestic consumption and reduce excessive saving.
I’m generally suspicious of anything coming out of this institution, but she’s probably right about the point that they need to decrease the need for people to save. Building a comprehensive welfare system that includes pensions will do that.
The IMF technical reports are right more often than not. The issue with the IMF is when they make a funding program, common sense goes out of the window and gets replaced by backroom deals and petty politics from the countries providing the money.
Case in point, some of the harshest criticism of IMF bailout programs comes from the IMF itself.
This is true for more or less all international and national agencies (World Bank, OECD, CIA, all EU agencies, …). Their reports are extremely good and accurate, but the problem is that politics doesn’t appear to be listening.
