IMF urges China to speed up structural reform, raises growth forecasts
- - IMF urges China to speed up structural reform, raises growth forecasts
ReutersDecember 9, 2025 at 11:32 PM
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Illuminated skyscrapers of the Lujiazui financial district and the Huangpu river in Shanghai, China, November 4, 2025. Picture taken with long exposure. REUTERS/Maxim Shemetov
BEIJING, Dec 10 (Reuters) - The International Monetary Fund on Wednesday urged China to speed up structural reform, as global pressure mounts on the world's second-largest economy to shift to a consumption-led growth model and rein in debt-driven investment and exports.
The manufacturing juggernaut has posted a $1 trillion trade surplus for the first time and is set to drive up to 40% of global growth in 2025. This has sparked criticism that China's slowing economy relies on dominating a larger share of global trade and flooding emerging markets with cheap goods diverted from the U.S. following President Donald Trump's tariffs.
"China's large economic size and heightened global trade tensions make reliance on exports less viable for sustaining robust growth," the IMF said in a press release marking the conclusion of the global lender's regular review of its economy.
"The key policy priority for China is to transition to a consumption-led growth model, away from an overreliance on exports and investment."
"This transition requires more urgent and forceful expansionary macroeconomic policies, reforms to reduce elevated household savings, and a scaling back of inefficient investment and unwarranted industrial policy support," the Fund added.
Beijing closely watches the IMF's "Article IV" review for approval or criticism of its economic management, with its endorsement serving as a valuable counter amid rising tensions with major trading partners.
"China's economy has shown notable resilience despite multiple shocks in recent years," the IMF said. It did not directly mention Trump or China's tariff war with the U.S.
The IMF upgraded its China growth forecast for 2025 to 5.0% from 4.8%, but warned that weakness in its property sector, local government indebtedness, and depressed domestic demand would continue to test policymakers. The Chinese economy is now expected to grow by 4.5% in 2026, up from 4.2%.
"Macroeconomic policy support should also be accompanied by stepped-up reforms to strengthen the social protection system and support the property sector adjustment," the IMF said.
(Reporting by Joe CashEditing by Shri Navaratnam)
Source: “AOL General News”
