China should accelerate boosting domestic consumption and scale back its heavy reliance on exports for growth, according to IMF Managing Director Kristalina Georgieva. Speaking in Beijing, Georgieva warned that as the world’s second-largest economy, China cannot rely on export-led growth for much longer without risking further global trade frictions. She emphasized that speeding up a long-running plan to shift away from export-driven expansion would benefit both China and the global economy, and would reduce the likelihood that other countries respond with measures to curb Chinese shipments.
Georgieva’s remarks come amid rising trade tensions with the United States, and growing concern in Europe and among some trading partners about the volume of Chinese-made cars and other goods. China’s trade surplus topped the trillion-dollar mark through November, while domestic consumer demand has remained soft since the pandemic, influenced in part by a protracted real estate downturn and waning household sentiment.
The IMF estimates that China would need to allocate roughly 5% of GDP over the next three years to decisively address property-market problems. This could be achieved through tighter coordination of fiscal and industrial policies, with a focus on completing pre-sold housing developments and allowing unviable developers to exit the market—the so-called “zombie firms” would be allowed to fade away, Georgieva argued.
IMF analysis also suggests that expanding social support, especially in rural areas, could lift consumption by as much as 3 percentage points of GDP in the medium term. While policy measures are essential, Georgieva stressed that market forces should play a larger role, particularly in advancing China’s tech sector and reforming the yuan’s exchange rate to reflect fundamentals.
The IMF noted that China’s relatively low inflation, compared with trading partners, has contributed to real exchange-rate depreciation, supporting strong exports and a rising current-account surplus.
Separately, the IMF raised its 2026 growth forecast for China to 4.5%, citing domestic stimulus and lower-than-expected tariffs, marking a modest upgrade from its October projection. The IMF also nudged up 2025 growth to 5% and expects inflation to average around 0.8% next year, up from near 0% this year. China recently reported November CPI at 0.7% year over year, the highest in nearly two years.
Beijing’s shift toward a more consumption-led growth model is viewed by the IMF as requiring faster and more forceful policy stimulus. In October, Chinese leaders outlined five-year development goals prioritizing increased consumption alongside technological self-sufficiency. An annual meeting is anticipated to discuss next year’s economic plan.
The IMF’s comments came as its team completed a 10-day visit for the Article IV Consultation, engaging with Premier Li Qiang, Vice Premier He Lifeng, PBOC Governor Pan Gongsheng, and finance and commerce ministers. Li also met with Georgieva and the heads of several other major international economic organizations, underscoring ongoing cooperation amid widening global economic uncertainty.
