IMF urges China to prioritise consumption-led rebalancing, curb industrial policy
Global monetary body calls on Beijing to roll out more forceful fiscal stimulus to bolster domestic demand amid record trade surplus
“China needs to move decisively towards consumption-led growth,” Sonali Jain-Chandra, IMF mission chief for China, said in an interview with the South China Morning Post.
She added that the IMF welcomed Beijing’s focus on consumption in its 15th five-year plan proposals and the readout of December’s central economic work conference, which set the economic agenda in the year ahead.
Jain-Chandra cited a comprehensive policy package IMF staff set out in a recently published annual review of China’s economy – known as the Article IV consultation – urging more forceful fiscal stimulus to lift consumption and address strains in the property sector, alongside stronger social protection, further monetary easing and greater exchange-rate flexibility.
“Transitioning to a consumption-led growth model should be the overarching priority,” the IMF executive board said in a statement accompanying the report. “An expansionary stance should be maintained until deflationary pressures subside durably.”