Despite skeptics, IMF’s Lagarde upbeat on China economy  

IMF回应中国经济超美：标准不同 对中国经济有信心

国际货币基金组织(IMF)总裁拉加德9日在IMF与世界银行2014年秋季会议上表示，中国的持续稳定发展有目共睹。她在回应“中国超美成第一经济体”时表示，在评价经济总量的标准上，仁者见仁，智者见智。[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.