IMF Urges China to Shift from Exports to Consumption

The International Monetary Fund urged China to urgently transition its economic growth model from an export-led strategy to one driven by domestic consumption. During a press briefing in Washington, IMF Communications Director Julie Kozack cited significant structural challenges, including subdued domestic demand, weakening productivity growth, and demographic pressures from an aging population.

While the IMF projects China's growth will slow to 4.6 percent in 2026, the economy remained stable in the first half of the year. This resilience was driven by rapid artificial intelligence innovation and an 18.4 percent surge in high-tech and value-added manufacturing exports. The World Bank offered a similar outlook, projecting a 4.4 percent expansion for 2026.

Economists describe the current trend as a K-shaped recovery, where industrial upgrading outpaces the struggling property sector and consumer spending. To counter this divergence, the People's Bank of China pledged an accommodative monetary policy. The IMF further recommended more forceful expansionary macroeconomic policies and reforms to reduce high household savings to stimulate long-term economic resilience.