IMF chief urges Beijing to improve communication on economic policy

The Chinese government must become better at explaining its economic moves to the world, International Monetary Fund (IMF) chief Christine Lagarde said Thursday.

The recent global market turbulences were partly caused by unclear communication about Beijing's efforts to stabilize economic growth, the IMF managing director said during a debate at the annual World Economic Forum of government and business leaders in Davos.

"There is a communication issue," Lagarde said. "It's something that markets do not like, uncertainty, not knowing exactly what the policy is, not knowing exactly against what the renminbi is going to be valued," she said referring to the Chinese currency.

At the same time, Lagarde expressed optimism that the world's second largest economy would manage the shift from manufacturing to services and consumption.

"Better and more communication would certainly serve that transition better," the French IMF chief said.

In the past weeks, global financial markets were rattled by new economic data from China that increased worries about a further slowdown of the country's growth.

The economy expanded by only 6.9 per cent last year, the lowest rate since 1990.

Market turbulences were further fuelled by Beijing's economic interventions, including a policy of interrupting or stopping trade in case of a sharp drop of market rates.

Lagarde on Thursday received official backing from the German and British finance ministries to serve for a second term as IMF chief.

She reiterated in an interview with Bloomberg TV in Davos that she was "prepared to consider a second term" but insisted that it was up to IMF member states to decide on its leadership.

Last update: Thu, 21/01/2016 - 13:26

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