{
  "title": "Transcript of the Press Briefing on the 2020 China Article IV Staff Report",
  "publication": "IMF News, January 8, 2021",
  "sourceUrl": "https://www.imf.org/en/news/articles/2021/01/08/tr010821-transcript-of-the-press-briefing-on-the-2020-china-article-iv-staff-report",
  "canonical": "https://www.imf.org/en/news/articles/2021/01/08/tr010821-transcript-of-the-press-briefing-on-the-2020-china-article-iv-staff-report",
  "overlayPath": "/en/news/articles/2021/01/08/tr010821-transcript-of-the-press-briefing-on-the-2020-china-article-iv-staff-report/index.md",
  "summary": "China is recovering fast, ahead of most large economies, but the recovery is still unbalanced and facing significant downside risks.",
  "publishDate": "2021-01-08",
  "sections": [
    {
      "heading": "Near-term outlook and balance of recovery",
      "content": "- China is recovering fast, ahead of most large economies, but the recovery is still unbalanced and facing significant downside risks.\n- Growth projections and related statements:\n  - Growth at around 2 percent in 2020.\n  - Growth around 8 percent in 2021; IMF staff note December numbers have been surprising on the upside and there are some upside risks to that forecast.\n  - IMF earlier reference: latest number cited by a questioner was 7.9 percent, a little lower than 8.2 percent (from November); staff describe this as a small revision relative to earlier projections.\n- Main concerns:\n  - Recovery relies mostly on public support; private investment has strengthened recently, but consumption is lagging.\n  - The level of consumption compared to its pre-crisis trend is still rather low.\n  - Staff estimate an output gap this year of 1.8 percent.\n- External and domestic downside risks:\n  - Pandemic risk remains prominent.\n  - Financial stability issues on the corporate and banking side.\n  - A more difficult external environment for China and its economic relations with other countries."
    },
    {
      "heading": "Policy guidance: macroeconomic stance and composition",
      "content": "- Two central short-term recommendations:\n  - Do not withdraw macroeconomic policy support prematurely.\n  - Adjust composition of macroeconomic support away from investment towards household support to directly help consumption; strengthen the social safety net.\n- Monetary policy guidance:\n  - Remain accommodative in 2021; underlying inflation pressures are quite low given a negative output gap.\n  - Avoid a macroeconomic support cliff; continue support while shifting composition toward consumption.\n- Fiscal policy guidance:\n  - Continue support in the short term while reorienting fiscal measures to facilitate the handover from public support to private consumption.\n  - Short-term fiscal measures that can act quickly include stimulus checks and extensions or easier access to unemployment insurance; some measures will take longer (e.g., improved delivery via FinTech).\n  - Example of social safety net gaps: unemployment insurance coverage is \"spotty\" — \"one in three urban workers\" is covered by employment insurance, and \"one in five migrant workers\".\n- Financial stability tools:\n  - Use macroprudential policies, regulatory and supervisory measures proactively to address financial stability concerns, allowing the central bank to focus on monetary objectives."
    },
    {
      "heading": "Structural reform priorities for sustained, higher-quality growth",
      "content": "- Reform areas highlighted:\n  - Continue SOE reform and reforms to ensure a level playing field between private firms and state-owned firms.\n  - Pursue structural reforms in the real sector to improve domestic sources of growth, especially given a less favorable external environment.\n- Productivity gap:\n  - On IMF staff numbers, \"productivity across all sectors is around 30 percent of the global frontier.\"\n- Rebalancing infrastructure spending:\n  - Shift some infrastructure spending away from traditional projects toward \"smart infrastructure\" and \"green investment\" to support higher-quality growth.\n- International engagement:\n  - China’s actions on debt relief for low-income countries, pledges to help low-income countries gain access to affordable vaccines, and pledges on fighting climate change are highlighted as important global contributions."
    },
    {
      "heading": "Financial sector risks and recommended actions",
      "content": "- Corporate debt and banking sector vulnerabilities:\n  - Corporate debt rose in the crisis and is estimated at \"around 130 percent of GDP at the end of last year\" (staff estimate).\n  - Concerns about declining quality of corporate debt and concentrations on bank balance sheets, especially smaller regional banks that showed stress pre-pandemic.\n- Recommended actions:\n  - Maintain careful withdrawal of direct support to corporates; ensure robust corporate restructuring mechanisms (legal and regulatory steps).\n  - Strengthen financial regulatory frameworks and reinforce banks’ balance sheets with high-quality capital (equity rather than debt).\n  - Construct frameworks for anticipated, well-understood bank restructuring that may include government support as last resort."
    },
    {
      "heading": "Digital currency (DC/EP / e-CNY) observations and risks",
      "content": "- IMF view:\n  - China is at the frontier of central bank digital currency developments; benefits and risks must be studied carefully.\n- Potential benefits:\n  - Promote financial inclusion; help monetary policy transmission; facilitate targeted fiscal support to low-income households.\n- Key risks to assess:\n  - Operational risks (cyber-attacks) and other vulnerabilities of electronic monetary units versus printed notes.\n  - International considerations: any digital currency used in cross-border transactions raises issues (e.g., potential for currency substitution) that could affect macroeconomic policy.\n- AML/CFT and other regulatory assessments are needed before broader roll-out."
    },
    {
      "heading": "Specific policy actions and measures discussed",
      "content": "- Property sector and regulatory steps:\n  - PBOC set caps for the proportion of outstanding property loans to total loans in five different bank tiers, effective on January the 1st; staff are studying the measure and have factored announced measures into baseline assumptions (including a normalization of real estate sector activity).\n- Exchange rate observations:\n  - IMF does not provide a formal exchange rate prediction.\n  - Staff note the renminbi has been \"quite remarkably flexible\": December 2019 around 6.9 versus the dollar; as China went into lockdown the exchange rate fell to \"something like 7.2\"; \"today it's around 6.5 or even below.\"\n  - Flexibility is viewed as helpful for macroeconomic adjustment; staff assume continued flexibility.\n- External lending and Belt and Road:\n  - IMF welcomes China’s engagement in overseas lending when conducted transparently and for productive projects; transparency about amounts and purposes is important.\n  - Support for low-income countries in the short term includes IMF lending and G-20-organized debt relief, with China playing an important role."
    },
    {
      "heading": "Fiscal framework, local government debt, and medium-term consolidation",
      "content": "- Staff advice:\n  - Focus on broader concept of general government, including on-budget and off-budget local government activity.\n  - Medium-term fiscal consolidation is necessary to ensure stability while preserving capacity to support growth.\n  - IMF engaged in capacity development to help improve macro-fiscal frameworks and address hidden local government debt risks."
    },
    {
      "heading": "Additional practical insights and lessons",
      "content": "- Pandemic management lessons for other countries:\n  - Rapid local restrictions, rapid testing, rapid tracing, and seeing measures through can allow economies to recover without waiting for vaccines.\n  - Digital enhancements of business and services can be effective where electronic communication networks exist.\n  - Vaccines remain ultimately necessary for full global recovery; China’s pledges to facilitate vaccine access for low-income countries are welcomed.\n\nTranscript of the Press Briefing on the Publication of the 2020 China Article IV Staff Report, January 8, 2021 — IMF Communications Department\n\n---\n\n\n References\n\n- People's Republic of China and the IMF\n- United States and the IMF\n- IMF Policy Advice -- A Factsheet\n- Transcripts\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2021/01/08/tr010821-transcript-of-the-press-briefing-on-the-2020-china-article-iv-staff-report"
    }
  ],
  "bullets": [
    "[Markdown version](/en/news/articles/2021/01/08/tr010821-transcript-of-the-press-briefing-on-the-2020-china-article-iv-staff-report/index.md)",
    "[Structured JSON version](/en/news/articles/2021/01/08/tr010821-transcript-of-the-press-briefing-on-the-2020-china-article-iv-staff-report/index.json)",
    "[Bundle manifest](/en/news/articles/2021/01/08/tr010821-transcript-of-the-press-briefing-on-the-2020-china-article-iv-staff-report/bundle-manifest.json)",
    "Published: January 8, 2021",
    "China is recovering fast, ahead of most large economies, but the recovery is still unbalanced and facing significant downside risks.",
    "Growth projections and related statements:",
    "Main concerns:",
    "External and domestic downside risks:",
    "Two central short-term recommendations:",
    "Monetary policy guidance:",
    "Fiscal policy guidance:",
    "Financial stability tools:",
    "Reform areas highlighted:",
    "Productivity gap:",
    "Rebalancing infrastructure spending:",
    "International engagement:",
    "Corporate debt and banking sector vulnerabilities:",
    "Recommended actions:",
    "IMF view:",
    "Potential benefits:",
    "Key risks to assess:",
    "AML/CFT and other regulatory assessments are needed before broader roll-out.",
    "Property sector and regulatory steps:",
    "Exchange rate observations:",
    "External lending and Belt and Road:",
    "Staff advice:",
    "Pandemic management lessons for other countries:",
    "[People's Republic of China and the IMF](http://www.imf.org/external/country/CHN/index.htm)",
    "[United States and the IMF](http://www.imf.org/external/country/USA/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[Transcripts](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
  ],
  "alternates": {
    "markdown": "/en/news/articles/2021/01/08/tr010821-transcript-of-the-press-briefing-on-the-2020-china-article-iv-staff-report/index.md",
    "json": "/en/news/articles/2021/01/08/tr010821-transcript-of-the-press-briefing-on-the-2020-china-article-iv-staff-report/index.json",
    "bundleManifest": "/en/news/articles/2021/01/08/tr010821-transcript-of-the-press-briefing-on-the-2020-china-article-iv-staff-report/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-26T00:03:19.505Z"
}