IMF urges China to prioritise consumption-led rebalancing, curb industrial policy
South China Morning Post
by Sylvia MaFebruary 25, 2026
AI-Generated Deep Dive Summary
The International Monetary Fund (IMF) has issued a strong call for China to prioritize a shift toward consumption-led economic growth, warning that failing to do so could exacerbate external imbalances and hinder sustainable development. The IMF’s recommendations, released ahead of Beijing’s annual parliamentary sessions, emphasize the need for China to curb what it describes as “unwarranted industrial policies” and focus on rebalancing the economy. This push comes amid growing global concerns about China’s trade surplus and its impact on international markets.
The IMF highlights that China’s current growth model, heavily reliant on investment and exports, has contributed to excess capacity in key industries and rising external pressures. By transitioning to a consumption-driven economy, China could reduce its reliance on export-led growth and better align with global expectations for more balanced trade dynamics. The Fund also warns that maintaining excessive industrial policies could lead to market distortions and hinder the development of a more efficient and competitive domestic economy.
The timing of these recommendations is significant, as they coincide with heightened international scrutiny of China’s economic practices. Last year’s trade surplus, which reached record levels, has drawn criticism from trading partners, particularly in the West. The IMF’s urging for China to adopt a more consumption-focused approach reflects a broader consensus among global economic institutions that rebalancing is critical to maintaining long-term stability and growth.
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Originally published on South China Morning Post on 2/25/2026