BEIJING - China needs to take reform measures to make its growth "more inclusive, friendlier to the environment, and more sustainable," Christine Lagarde, International Monetary Fund (IMF) managing director, said in Beijing on Monday.
"China is again at a crossroads. While headline growth numbers remain impressive, this disguises some serious obstacles that need to be overcome," she said during a keynote speech at the three-day China Development Forum, which began in Beijing on Saturday.
The reform blueprint announced at the Third Plenary Session of the Communist Party of China's 18th Central Committee is an impressively ambitious and comprehensive response to the challenge, she said.
The next round of reforms must be aimed at increasing the role of the modern services sector. China has taken steps to modernize its financial sector, but there is still some way to go to establish the modern, robust, and globally integrated financial system that is essential to support China's next transformation. Chinese financial institutions would benefit from more competition and knowledge-transfer, she said.
"Overall, global prospects of the economy are improving. The world economy is slowly turning the corner, although growth remains too weak and too unbalanced. In January, we projected global activity to strengthen from 3 percent in 2013 to about 3.7 percent in 2014 - largely driven by improvements in the advanced economies," Lagarde said.
Activity in emerging markets and developing economies picked up slightly in the latter part of 2013, driven by stronger external demand from advanced economies. Although tighter external financial conditions will be a drag on domestic demand, emerging Asia will continue to be a bright spot, posting the highest growth rate of about 6.7 percent this year and next, she said.
China will continue to be a key driver of this momentum, albeit with lower but more sustainable growth rates, said the IMF chief.
"China has clearly emerged as a stabilizing force in the global economy. In fact, China accounted for more than a third of total global growth over the past five years -- and for almost 50 percent of the emerging and developing economies' growth," she added.