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In its regular assessment of one of the world’s leading economies, the IMF said China’s “quick, determined, and effective policy response” meant it was now spearheading the global recovery.

In an interview with IMF Survey online, the Fund’s lead economist on China, Nigel Chalk, said that despite the global slump, the country’s economy had posted an impressive performance.

IMF Survey online: China’s future economic outlook is fairly rosy, according to the IMF, and the Fund is now calling for a gradual withdrawal of stimulus measures. Can you explain how you have come to that conclusion?

Chalk: What we saw going into the crisis was a quite decisive policy response by the government. They clearly understood that the downturn of the global economy would greatly affect China, and you saw a response that involved a large fiscal package to stimulate the economy. It also involved a quite significant amount of monetary stimulus. All of these things kind of work together, they’re all very helpful in supporting the economy in the face of this very large external shock. And you see that in the outturn for 2009. During that year you had more than 4 percent of GDP drag on the economy from the decline of exports. Nevertheless the economy grew overall by more than 9 percent, which is quite an impressive achievement. Our assessment is a large part of that was driven by the public sector stimulus.

IMF Survey online: And indeed, IMF economists are predicting that China’s going to return to double digit growth.

Chalk: Yes. So we have a forecast for this year around 10½ percent growth in GDP. And then they’ll slow a little bit into next year, partly as the public stimulus is withdrawn. But we see that as a very healthy process. It will still be quite close to 10 percent of GDP.

IMF Survey online: How important has China’s stimulus been to global growth?

Chalk: Demand in China has been very helpful to both the region and the global economy. I think what you saw initially in China as the stimulus got into place was a significant increase in commodity imports which helped all of the commodity exporters around the world, particularly countries like Australia and Indonesia who provide a significant amount of commodities to China. But as the process of recovery carried on, you saw a much more...