WASHINGTON, July 28 -- Chinese authorities "quick, determined and effective" policy response to the global financial crisis has helped mitigate the impact on the economy and ensured that China has led the global recovery, the International Monetary Fund (IMF) said on Tuesday.
"Executive Directors commended China' s proactive and decisive policy response to the global economic crisis," the IMF Executive Board said in its annual report on China's economic policy assessments and recommendations after consultation with Chinese authorities.
The IMF appraised fiscal stimulus China adopted during the crisis. "Public infrastructure spending was quickly increased, taxes were lowered, the government put in place incentives to boost purchases of consumer durables, and pensions, social transfers, healthcare and education spending were all raised," it noted.
On the part of monetary policy, the report noted that China's central bank lowered interest rates and reserve requirements, and removed limits on credit growth, which led to an extraordinary surge in bank lending.
"These policies were instrumental in arresting the downward momentum to both activity and confidence," said the report.
China's economic growth began to pick up in the second quarter of 2009 and reached an average for the year of 9.1 percent. The IMF expected its economic growth to continue to be robust.
The report said China's economic recovery has "significant positive spillovers" to the region and the world economy as a whole, both through increased demand for commodities and through higher imports of capital goods.
China's recovery has driven up its demand for big-item commodities such as crude oil, metals and agricultural products, which contributed to a surge in global commodity prices. On the other hand, economic recovery boosted the country's demand for imported goods, resulting in a quick decline in its current account surpluses.