The head of the International Monetary Fund has urged China to fix its economic imbalances, saying the country of 1.4 billion people is too big to rely on exports for its growth. China’s global exports have been rising while shipments to the United States have contracted after President Donald Trump hiked taxes on imports from China and many other countries. Earlier this week, Beijing reported its trade surplus for 2025 had already exceeded a record $1 trillion.
IMF Managing Director Kristalina Georgieva said the heavy reliance on exports risks provoking more moves by its trading partners to curb imports from China. “(China’s) continuing to depend on export-led growth risks furthering global trade tensions,” Georgieva told a press conference on Wednesday. “China is now too big to rely on exports as a source for growth... and (it has) a large domestic market that can be a big aspiration for growth in the years to come.”
At a high-level meeting in October aimed at drawing up plans for the next five years, China’s leaders highlighted the need to boost domestic consumption. The ruling Communist Party has long sought to rebalance the economy away from heavy dependence both on exports and on massive investment in infrastructure.
But the COVID-19 pandemic intervened, along with a prolonged downturn in the real estate market that has slowed activity for that once powerful engine for growth. Meanwhile, Beijing has pushed hard to expand manufacturing in high-tech industries, struggling to rein in excessive capacity in some areas such as automaking.
Morgan Stanley recently predicted that by 2030, China's market share in global exports could reach 16.5%, up from about 15% currently, supported by its advanced manufacturing and high-growth segments like robotics, electric vehicles and batteries.
Georgieva was visiting Beijing for an annual economic forum involving the heads of major international organisations. The IMF was concluding its annual review of China. Softening domestic consumption and demand in China has contributed to a weakened yuan versus the dollar and other currencies. That has made China’s exports cheaper compared with those of other countries, reinforcing trade imbalances.
The IMF said comprehensive policies are needed to encourage Chinese people to spend more. While China’s market is huge and still growing at a nearly 5% annual pace, domestic demand has weakened as consumers cut back on spending due to job and income losses during and after the pandemic.
The years-long property downturn has also hit household wealth, crimping shoppers’ appetites for spending and sapping demand for imports, amplifying the trade imbalance. Helping to offset the decline in exports to the US, China is selling more in other countries in Africa, Latin America, Southeast Asia and Europe. That has led to complaints from China's trading partners as its imports have failed to keep pace.
Wednesday, the EU Chamber of Commerce in China also warned its substantial trade surplus is raising worries. The IMF’s remarks followed Chinese Premier Li Qiang’s comments to the international group of financial experts on Tuesday that higher tariffs have “dealt a severe blow” to the global economy.
