I.M.F. Urges China to Re‑evaluate Its Export‑Driven Growth Model

Caught Between Beijing’s Policies and Washington’s Pressure

The International Monetary Fund has issued a measured warning to China, suggesting that the country’s heavy reliance on export‑led growth may be unsustainable in the long run. While the IMF’s comments are mild, they signal growing concern among global financial watchdogs about the stability of China’s economic strategy.

According to the fund’s latest assessment, China’s current trade‑centric model exposes the economy to external shocks and could limit its ability to transition to a more balanced, consumption‑driven growth path. The IMF notes that a stronger emphasis on domestic demand, innovation, and services would help mitigate these risks.

Beijing, meanwhile, is navigating a delicate diplomatic tightrope. On one side, it faces pressure from the Trump administration to address trade imbalances and currency practices. On the other, it must manage internal expectations for continued rapid development and job creation.

In its report, the IMF emphasizes that a modest appreciation of the yuan could reduce trade tensions and improve the competitiveness of Chinese firms in the global market. However, it also cautions that any abrupt policy shifts might destabilize the domestic economy.

Chinese officials have responded by affirming their commitment to “steady and prudent” economic reforms, underscoring the importance of maintaining a stable currency while pursuing structural adjustments.