(Yicai Global) June 30 -- The Chinese economy is performing well, and the One Belt, One Road strategy may become a new growth driver in future, said Zhu Min, former managing director of the International Monetary Fund (IMF) at the Summer Davos conference in Dalian today.

China's economy is now doing well overall, and the external political and economic climates are improving, he noted. "Exports are growing rapidly amid profound changes in the economic structure. Consumption as a percentage of total gross domestic product growth has exceeded 60 percent, alongside healthy employment and investment growth figures."

"If the current situation continues, we should be optimistic about China's economic growth next year, with structural changes laying a solid foundation for future economic development," Zhu noted, prompted by solid investment growth, recovery in the export sector and a continuous rise in consumer spending.

The Belt and Road initiative may contribute more to economic growth than the market expected, because is no longer limited to outbound investment and export of production capacity, he added, remarking that "It now involves comprehensive opening of financial markets, regulator coordination and cross-border training. It provides the groundwork for driving investment and trade activities in future, and will become a new economic growth driver for China."

China needs to push ahead with the deleveraging campaign, as well as further enhancing its overcapacity reduction capability taking a market-oriented approach, he continued. "Last year, the country slashed overcapacity by some 300 million tons of coal and over 80 million tons of steel, but the capacity utilization rate still remains low at about 70 percent. Overcapacity reduction can be achieved through administrative measures, but it is more important to cut excess capacity via a market-based approach."

The government should focus on rejuvenating idle assets, and bringing capital to areas where it is needed to maximize benefits, employing market-based methods such as merger and acquisition, liquidation and reorganization, he advised.