OECD urges China to free markets, ease migration

U.S. Treasury Secretary Jacob Lew, left, speaks with Chinese Premier Li Keqiang during their meeting at the Zhongnanhai diplomatic compound in Beijing Wednesday, March 20, 2013. Lew has stressed China’s and America’s shared interest in ensuring global economic growth in the meeting. (AP Photo/Andy Wong, Pool)

BEIJING—The Organization for Economic Cooperation and Development has urged China to force state companies to compete in more open markets and ease movement of migrants into cities to keep its economic growth strong.

The OECD gave an upbeat assessment of China’s economic outlook Friday that forecast growth of 8.5 percent this year and said risks from inflation and government debt are low.

But it said Beijing must act on longer-term challenges including improving productivity by curbing monopolies for state companies and allowing workers to move more easily into cities to get higher paid jobs.

Other advisers including the World Bank also have said China could face a steep decline in economic growth if Beijing fails to reduce the dominance of state companies in industries including energy and finance.