The International Monetary Fund (IMF) on Wednesday called on China to accelerate its structural reforms, as global pressure increases on the world’s second-largest economy to shift toward a consumption-driven growth model and reduce its dependence on debt-fueled investment and exports.
China recently recorded a $1 trillion trade surplus for the first time and is projected to contribute up to 40% of global economic growth in 2025. However, these figures have raised concerns that China’s slowing economy is leaning heavily on dominating global trade, with excess goods redirected to emerging markets after former U.S. President Donald Trump’s tariffs limited access to the American market.
According to the IMF, China’s economic scale and rising global trade tensions mean that an export-dependent strategy is becoming less sustainable. The Fund stressed that the country must transition to a consumption-led growth model, reducing its reliance on exports and large-scale investment.
The IMF said this transition will require stronger and more urgent macroeconomic support, reforms that lower high household savings rates, and a reduction in inefficient investment and excessive industrial policy incentives.
Beijing pays close attention to the IMF’s Article IV review, which evaluates the country’s economic policies. A positive assessment is often used by China to reinforce its position amid increasing disputes with global trading partners.
The IMF noted that China’s economy has shown significant resilience despite multiple shocks in recent years. While the Fund did not directly mention Trump or the trade war, it highlighted ongoing vulnerabilities.
The IMF raised its 2025 China growth forecast to 5.0%, up from 4.8%, but warned that property-sector weakness, rising local government debt, and soft domestic demand will continue to challenge policymakers. Growth in 2026 is now expected to reach 4.5%, up from 4.2%.
The Fund added that macroeconomic support must be paired with deeper reforms, including strengthening China’s social safety net and guiding a smoother adjustment in the property sector.
