China is advised by the International Monetary Fund (IMF) to revamp its economic growth model by focusing more on domestic consumption rather than exports. The IMF highlighted concerns about weak demand, slowing productivity, and an aging population in China. Despite a slight increase in the growth forecast for 2026, the IMF emphasized persistent structural challenges facing the Chinese economy.
Julie Kozack, Director of the IMF’s Communications Department, pointed out significant weaknesses in China’s economy, including subdued domestic demand and rising external imbalances. The IMF also expressed worries about declining productivity growth and demographic challenges due to an aging population. To address these issues, the IMF recommended a shift from an export-led growth model to one driven by domestic consumption.
Kozack stressed the importance of implementing more forceful macroeconomic policies and reforms to reduce high household savings in China. The IMF also called for continued support for the country’s property sector as part of the reform agenda. The IMF has consistently advocated for structural reforms in China to enhance long-term economic resilience and stability amid challenges in domestic demand and external trade.
