Davos: The Chinese economy is unlikely to see ‘hard landing’ and it would be in the interest of the world that China returns to a sustained growth path, IMF chief Christine Lagarde said today. She also said the fourth industrial revolution currently underway would bring about a major change in the world and would require change in the way GDP is calculated.
“One of the things that I take away from WEF on fourth industrial revolution, is that we will have to change the way we calculate GDP,” she said at global economic outlook session on the last day of the World Economic Forum meeting here.
“We were fearing that there would be hard landing in China, but almost everybody here at Davos now feels that it is not going to be a hard landing. “We are going to see an evolution, not a hard landing and a move towards a sustainable growth,” she said.
Speaking at the same session, Credit Suisse chief Tidjane Thiam said the markets have been over-reacting to the developments and China will have a soft landing. British Chancellor of Exchequer George Osborne said that India and China have been two finds of the world in terms of GDP growth.
“It will be massively in our interest that we bring China at multilateral bodies and we support their currency and they become part of the mainstream global economy,” he said. Osborne further said that Britain has been one of the bright spots in an otherwise gloomy economic situation.
“By following a clear economic plan, we have given UK very secure path,” he added. On Brexit (Britian’s possible exit from EU), which was named by Lagarde as one of the major risks to watch out for the global economy, he said Britain is the second largest economy in the EU and it is set to become the largest.
“We are seeking a much more competitive EU. We need to put all the plans that are there at EU into action and we are pushing our partners for a much more competitive EU. There are concerns in UK about the levels of migration.
“Finally, we have to resolve that the eurozone and non-eurozone need a much better working relationship. I think we are going to find a much better relationship with our partners in EU,” Osborne said. He hoped that a deal could be there next month.
“I think we are going to get a deal at the February meeting of the EU governing council. And I think it would be good for not just Britain but entire Europe. I am optimistic Britain will get a good deal,” he noted. Indian Finance Minister Arun Jaitley and Bank of Japan Governor Haruhiko Kuroda were also on the panel.
