US EditionIMF rebukes China's model with its own credibility in tatters
IMF highlights China’s 4% GDP subsidies, deflation, and surplus as global risks, urging rapid reforms to shift from export-led growth to consumption-driven economy.
- The International Monetary Fund criticized China for its heavy state support and export-led growth model, which distort global trade and create economic imbalances.
- The IMF urged China to shift towards a consumption-led growth model by implementing rapid structural reforms, including addressing the property sector crisis and strengthening social safety nets to boost consumer confidence.
- China faces economic challenges such as slow credit growth, deflation, industrial overcapacity, and political constraints limiting monetary policy easing.
- Overcoming these challenges requires convincing the population to save less and spend more, with stronger social protections and economic rebalancing from investment to consumption essential for sustainable growth.
15 Articles
15 Articles
IMF Says China’s State-Led Growth Model Is Hurting Other Economies, Calls for Subsidy Cuts
The International Monetary Fund (IMF) has sharply criticized China’s state-led growth model, warning that heavy industrial subsidies, debt-financed investment, and weak domestic demand are distorting the economy at home and creating damaging spillovers abroad. In a Feb. 18 report following the conclusion of the IMF’s most recent Article IV review of China and its economic policies, IMF analysts estimated that Beijing, as of 2023, spent about 4 p…
IMF rebukes China's model with its own credibility in tatters
As the International Monetary Fund takes China to task, the world’s “lender of last resort” is grappling with a new legitimacy crisis. It used to be a one-size-fits-all response to financial crackups that earned the IMF global ire. From the 1997-98 Asian financial crisis to the lead-up to the 2008 “Lehman shock” to any number […] The post IMF rebukes China’s model with its own credibility in tatters appeared first on Asia Times.
According to the Fund, China spends about 4% of its Gross Domestic Product (GDP) subsidizing companies in critical sectors.
FT: IMF calls on China to halve industrial subsidies
Key topics:IMF urges China to cut state support for industry amid overcapacity concerns.China’s industrial policies cause trade tensions and weak domestic demand.IMF recommends shift to consumption-led growth and social welfare reforms.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bas…
IMF urges China to halve industrial subsidies
The International Monetary Fund called on China to halve its industrial subsidies, as concerns mount about manufacturing overcapacity in the world’s second-biggest economy. Beijing has in recent years ramped up exports of manufactured goods, notably EVs and green energy technology, and built up a trade surplus of over $1 trillion. It has led to worry overseas and at home: Policymakers worry that domestic supply gluts are causing damaging price w…
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