Beijing is urged to shift to a consumption-based growth model.
According to the results of the outgoing year, China's economy will grow by five percent. This forecast was prepared by the International Monetary Fund (IMF). The conclusions of its analysts were quoted by the South China Morning Post (SCMP).
It is noted that the new forecast has been raised compared to the October estimates, which were 0.2 percentage points lower. The reason for the more optimistic assumptions is that Chinese authorities have resorted to stimulating the economy, and moreover, export tariffs turned out to be not as high as expected.
However, as the IMF believes, growth rates will slow down to 4.5 percent in 2026. According to the head of the fund's mission in China, Sonali Jain-Chandra, the Chinese economy demonstrates stability but faces challenges caused by persistent imbalances. In addition, problems in the real estate sector, weak domestic demand, and deflationary pressure are having an impact.
In this situation, the IMF urges Beijing to shift to a consumption-based growth model, ending excessive reliance on exports and investments.
According to the results for January-September 2025, investments by Chinese companies in fixed assets within the country fell by 1.7 percent, although it was expected that the decline would be no more than 0.8 percent.
Meanwhile, exports of rare earth minerals from China increased in November by 26.5% to 5,493.9 metric tons, Reuters reported.
The sharp increase occurred after several months of disruptions caused by strict export licensing requirements, which led to a halt in part of the global automotive supply chain.
Leave a comment