## IMF Executive Board Concludes 2020 Article IV Consultation with the People’s Republic of China

_IMF News, January 8, 2021_

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## Bibliographic details
- Published: January 8, 2021

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### Economic outlook and projections
- GDP growth projected at 1.9 percent in 2020 and 7.9 percent in 2021.
- Core inflation subdued; CPI inflation in 2020-21 expected to be below the pre-crisis target of about 3 percent.
- Corporate leverage expected to rise by about 10 percentage points of GDP in 2020.
- Current account surplus projected to widen to 1.9 percent of GDP in 2020 from 1.0 percent in 2019, then narrow to below 1 percent in 2021.
- Drivers of 2020 surplus: lower commodity prices, collapse in outbound tourism, surge in exports of pandemic-related and other goods supported by early recovery and higher export prices.

### Policy response and fiscal stance
- Policy measures: liquidity provision to banking system; expanded re-lending facilities to smaller enterprises; repayment moratorium until Q1 2021.
- Social measures: increased disbursement and coverage of unemployment insurance; tax relief and waived social security contributions by employers.
- General government deficit (including estimated off-budget investment spending) projected to rise to 18.2 percent of GDP in 2020 from 12.6 percent in 2019.
- Executive Directors recommended continuation of moderately supportive fiscal and monetary policies until recovery is on solid ground; medium-term fiscal consolidation necessary to ensure debt sustainability.
- Directors saw benefits in improving the macro-fiscal framework, including intergovernmental coordination and macroeconomic data.

### Financial stability and banking sector
- Temporary financial-sector support should be replaced with policies to address problem loans and strengthen regulatory and supervisory frameworks as recovery takes hold.
- Need for a comprehensive bank restructuring framework in line with international best practices to allow orderly exit of weaker banks.
- Directors noted potential benefits from digital currencies but called for more work to assess risks.
- Encouraged continued improvements to the AML/CFT framework.

### Structural reform progress and recommendations
- Progress noted: opening of the financial sector (shortening negative lists for foreign investment; removal of restrictions on investment quota for foreign institutional investors); hukou reforms improving labor mobility; amendment of patent law to strengthen intellectual property protection.
- Slow progress: real-sector reforms, especially state-owned enterprises (SOEs) and competitive neutrality between private and state-owned firms.
- Directors stressed need for further SOE reforms, including ensuring competitive neutrality and removing remaining implicit guarantees.
- Structural reform priorities: boost potential growth, reduce external imbalances, build a more resilient, green, and inclusive economy.

### External sector and exchange rate policy
- Directors expected temporary widening of current account in 2020 to narrow over the medium term as pandemic effects unwind and growth rebalances.
- Greater exchange rate flexibility recommended to help adjust to changing external environment.
- Some Directors called for improved transparency of foreign exchange interventions and phasing out of capital flow management measures.

### Global cooperation and multilateral responsibilities
- Directors welcomed authorities’ commitment to global cooperation and support for an open, rules-based international trade system.
- Encouraged China’s role in multilateral efforts: making any approved vaccine developed in China widely available and mitigating climate change.
- Noted China’s key role in G-20 DSSI and Common Framework for debt relief to low-income countries; further improvements in data transparency needed for success.

### Selected economic indicators (highlights from table)
- Real GDP (base=2015): 6.9 (2015), 6.8 (2016), 6.7 (2017), 6.1 (2018), 1.9 (2019? / 2020 as noted earlier), 7.9 (2021), 5.7 (2022), 5.6 (2023), 5.5 (2024), 5.4 (2025).
- Consumer prices (average): 1.4 (2015), 2.0 (2016), 1.6 (2017), 2.1 (2018), 2.9 (2019), 2.4 (2020), 0.5 (projection year unspecified).
- Total capital formation (percent of GDP): 43.0 (2015), 42.7 (2016), 43.2 (2017), 44.0 (2018), 43.1 (2019), 41.8 (2020), 41.2 (2021), 40.4 (2022), 39.6 (2023), 38.8 (2024), [value for 2025 not listed].
- Gross national saving (percent of GDP): 45.8 (2015), 44.5 (2016), 44.8 (2017), 44.1 (2018), 45.0 (2019), 42.0 (2020), 41.1 (2021), 40.2 (2022), 39.4 (2023).
- Total nonfinancial sector debt (percent of GDP): series includes values such as 222, 241, 277, 284, 289, 293, 295, 297 (table formatting indicates continued high levels across projection years).
- Household disposable income (percent of GDP): 61.1 (2015), 61.6 (2016), 60.1 (2017), 59.3 (2018), 59.1 (2019), 57.6 (2020), 59.2 (2021), 58.9 (2022), 58.6 (2023), 58.3 (2024).
- Household savings (percent of disposable income): 38.4 (2015), 37.2 (2016), 35.7 (2017), 34.8 (2018), 34.4 (2019), 37.1 (2020), 33.7 (2021), 31.8 (2022), 29.9 (2023), 27.9 (2024), 25.9 (2025).
- Household debt (percent of GDP): 39.1 (2015), 44.7 (2016), 48.9 (2017), 52.3 (2018), 55.6 (2019), 61.3 (2020), 62.4 (2021), 64.0 (2022), 64.9 (2023), 66.0 (2024).
- General budgetary government net lending/borrowing (Percent of GDP): -2.8 (2015), -3.7 (2016), -3.8 (2017), -4.7 (2018), -6.3 (2019), -11.9 (2020), -11.0 (2021), -10.1 (2022), -9.1 (2023), -8.3 (2024), -7.5 (2025).
- Revenue (percent of GDP): 28.8 (2015), 28.2 (2016), 27.8 (2017), 28.3 (2018), 27.7 (2019), 24.5 (2020), 25.0 (2021), 25.3 (2022), 25.8 (2023), 26.5 (2024), 27.1 (2025).
- Expenditure (percent of GDP): 33.5 (2015), 33.9 (2016), 34.2 (2017), 35.8 (2018), 36.9 (2019), 39.3 (2020), 38.9 (2021), 38.3 (2022), 37.9 (2023), 37.8 (2024), 37.6 (2025).
- Debt (percent of GDP): 36.7 (2015), 36.2 (2016), 36.5 (2017), 38.1 (2018), 47.2 (2019), 49.5 (2020), 51.2 (2021), 52.6 (2022), 53.8 (2023).
- Current account balance (percent of GDP): 1.8 (2015), 1.0 (2016), 0.8 (2017), 0.6 (2018).
- Gross official reserves (billions of U.S. dollars): 3,406 (2015), 3,098 (2016), 3,236 (2017), 3,168 (2018), 3,223 (2019), 3,579 (2020), 3,842 (2021), 4,127 (2022), 4,427 (2023), 4,734 (2024), 5,056 (2025).
- Nominal GDP (billions of RMB): 69,209 (2015), 74,598 (2016), 82,898 (2017), 91,577 (2018), 99,493 (2019), 103,462 (2020), 113,377 (2021), 122,286 (2022), 131,750 (2023), 142,072 (2024), 153,020 (2025).
- Augmented debt (percent of GDP): 55.2 (2015), 66.4 (2016), 72.8 (2017), 76.4 (2018), 80.5 (2019), 91.7 (2020), 96.4 (2021), 101.4 (2022), 105.6 (2023), 109.3 (2024), 112.7 (2025).
- Augmented net lending/borrowing (percent of GDP): -8.7 (2015), -15.9 (2016), -13.5 (2017), -11.8 (2018), -12.6 (2019), -18.2 (2020), -17.2 (2021), -16.3 (2022), -15.4 (2023), -14.6 (2024), -13.8 (2025).

### Executive Board assessment — key messages
- Commended authorities for effective containment measures and swift macroeconomic and financial policy support.
- Noted growth remains unbalanced; recommended policies to strengthen private demand for more balanced medium‑term growth.
- Recommended modernization of the monetary policy framework to strengthen transmission of conventional interest rate policies and enhance financial intermediation.
- Called for enhancements to the social safety net to reduce precautionary savings and greater progressivity in the tax system to address income inequality.
- Encouraged continued opening of the financial sector and further hukou reforms to improve labor mobility.
- Highlighted importance of China’s role in global vaccine availability, climate mitigation, and multilateral debt relief efforts, noting data transparency improvements are needed.

*IMF Executive Board Concludes 2020 Article IV Consultation with the People’s Republic of China — Press Release No. 21/1 (January 8, 2021).*

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## References

- [https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)
- [The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)
- [China: Country Report 2020](https://www.imf.org/en/Publications/CR/Issues/2021/01/06/Peoples-Republic-of-China-2020-Article-IV-Consultation-Press-Release-Staff-Report-and-49992)
- [People's Republic of China and the IMF](http://www.imf.org/external/country/CHN/index.htm)
- [IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)
- [Press Releases](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [http://www.IMF.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2021/01/06/pr211-china-imf-executive-board-concludes-2020-article-iv-consultation_