{ "title": "China’s Economy is Rebounding, But Reforms Are Still Needed", "publication": "IMF News, February 3, 2023", "sourceUrl": "https://www.imf.org/en/news/articles/2023/02/02/cf-chinas-economy-is-rebounding-but-reforms-are-still-needed", "canonical": "https://www.imf.org/en/news/articles/2023/02/02/cf-chinas-economy-is-rebounding-but-reforms-are-still-needed", "overlayPath": "/en/news/articles/2023/02/02/cf-chinas-economy-is-rebounding-but-reforms-are-still-needed/index.md", "summary": "Sustaining the recovery will require both monetary and fiscal support as well as accelerated structural reforms.", "authors": [ "Diego A. Cerdeiro", "Sonali Jain-Chandra February" ], "publishDate": "2023-02-03", "sections": [ { "heading": "Near-term outlook and key projections", "content": "- China’s economy is set to rebound this year as mobility and activity pick up after the lifting of pandemic restrictions.\n- The economy will expand 5.2 percent this year, according to our latest projections, versus 3 percent last year.\n- The Chinese economy is now expected to contribute a third of global growth this year.\n- Growth is currently below its potential amid muted inflation pressures." }, { "heading": "Main risks and headwinds", "content": "- The contraction in real estate remains a major headwind.\n- There is still some uncertainty around the evolution of the virus.\n- Longer-term headwinds include a shrinking population and slowing productivity growth.\n- Without reforms, growth is currently estimated to fall below 4 percent over the next five years." }, { "heading": "Policy recommendations to sustain the recovery", "content": "- Keep fiscal policy neutral this year.\n- Provide additional monetary policy accommodation to help secure the recovery.\n- Support orderly restructuring of troubled property developers to reduce risks." }, { "heading": "Structural reforms to boost medium-term growth and inclusiveness", "content": "- Raise labor supply by gradually lifting the retirement age.\n- Strengthen unemployment and health insurance benefits.\n- Reform state-owned enterprises to close their productivity gap with private firms.\n- These reforms are framed as ambitious but feasible and would raise the role of household consumption in demand.\n- Undertaking such reforms would enable China’s income level to rise by around 2.5 percent in five years." }, { "heading": "Global spillovers", "content": "- When China’s growth rate rises by 1 percentage point, growth in other countries increases by around 0.3 percentage points, according to recent IMF staff analysis.\n- Domestic reforms in China could therefore boost the global economy as well as China’s own.\n\nDiego A. Cerdeiro and Sonali Jain-Chandra; February 3, 2023 — IMF\n\n---\n\n\n References\n\n- https://www.imf.org/en/News/country-focus\n- https://www.imf.org/en/publications/weo\n- Global Economy in Crosscurrents of War and Technology\n- https://www.imf.org/en/publications/gfsr\n- Global Financial Markets Confront the War in the Middle East and Amplification Risks\n- https://www.imf.org/en/publications/fm\n- Fiscal Policy under Pressure: High Debt, Rising Risks\n- https://www.imf.org/en/publications/reo\n- Asia and Pacific\n- Europe\n- Middle East and Central Asia\n- Sub-Saharan Africa\n- Western Hemisphere\n- https://www.imf.org/en/publications/areb\n- Getting to Growth in an Age of Uncertainty\n- More Publications\n- latest projections\n- as we note in our annual report for China\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2023/02/02/cf-chinas-economy-is-rebounding-but-reforms-are-still-needed" } ], "bullets": [ "[Markdown version](/en/news/articles/2023/02/02/cf-chinas-economy-is-rebounding-but-reforms-are-still-needed/index.md)", "[Structured JSON version](/en/news/articles/2023/02/02/cf-chinas-economy-is-rebounding-but-reforms-are-still-needed/index.json)", "[Bundle manifest](/en/news/articles/2023/02/02/cf-chinas-economy-is-rebounding-but-reforms-are-still-needed/bundle-manifest.json)", "Authors: Diego A. Cerdeiro, Sonali Jain-Chandra February", "Published: February 3, 2023", "China’s economy is set to rebound this year as mobility and activity pick up after the lifting of pandemic restrictions.", "The economy will expand 5.2 percent this year, according to our latest projections, versus 3 percent last year.", "The Chinese economy is now expected to contribute a third of global growth this year.", "Growth is currently below its potential amid muted inflation pressures.", "The contraction in real estate remains a major headwind.", "There is still some uncertainty around the evolution of the virus.", "Longer-term headwinds include a shrinking population and slowing productivity growth.", "Without reforms, growth is currently estimated to fall below 4 percent over the next five years.", "Keep fiscal policy neutral this year.", "Provide additional monetary policy accommodation to help secure the recovery.", "Support orderly restructuring of troubled property developers to reduce risks.", "Raise labor supply by gradually lifting the retirement age.", "Strengthen unemployment and health insurance benefits.", "Reform state-owned enterprises to close their productivity gap with private firms.", "These reforms are framed as ambitious but feasible and would raise the role of household consumption in demand.", "Undertaking such reforms would enable China’s income level to rise by around 2.5 percent in five years.", "When China’s growth rate rises by 1 percentage point, growth in other countries increases by around 0.3 percentage points, according to recent IMF staff analysis.", "Domestic reforms in China could therefore boost the global economy as well as China’s own.", "[https://www.imf.org/en/News/country-focus](https://www.imf.org/en/News/country-focus)", "[https://www.imf.org/en/publications/weo](https://www.imf.org/en/publications/weo)", "[Global Economy in Crosscurrents of War and Technology](https://www.imf.org/en/publications/weo/issues/2026/07/08/world-economic-outlook-update-july-2026)", "[https://www.imf.org/en/publications/gfsr](https://www.imf.org/en/publications/gfsr)", "[Global Financial Markets Confront the War in the Middle East and Amplification Risks](https://www.imf.org/en/publications/gfsr/issues/2026/04/14/global-financial-stability-report-april-2026)", "[https://www.imf.org/en/publications/fm](https://www.imf.org/en/publications/fm)", "[Fiscal Policy under Pressure: High Debt, Rising Risks](https://www.imf.org/en/publications/fm/issues/2026/04/15/fiscal-monitor-april-2026)", "[https://www.imf.org/en/publications/reo](https://www.imf.org/en/publications/reo)", "[Asia and Pacific](https://www.imf.org/en/publications/reo/apac)", "[Europe](https://www.imf.org/en/publications/reo/eu)", "[Middle East and Central Asia](https://www.imf.org/en/publications/reo/meca)", "[Sub-Saharan Africa](https://www.imf.org/en/publications/reo/ssa)", "[Western Hemisphere](https://www.imf.org/en/publications/reo/wh)", "[https://www.imf.org/en/publications/areb](https://www.imf.org/en/publications/areb)", "[Getting to Growth in an Age of Uncertainty](https://www.imf.org/en/publications/areb/issues/2025/09/24/annual-report-2025)", "[More Publications](https://www.imf.org/en/publications)", "[latest projections](https://www.imf.org/en/News/Articles/2023/02/01/sp-china-aiv-press-briefing-opening-remarks)", "[as we note in our annual report for China](https://www.imf.org/en/Publications/CR/Issues/2023/02/02/Peoples-Republic-of-China-2022-Article-IV-Consultation-Press-Release-Staff-Report-and-529067)", "[https://www.imf.org/en/home](https://www.imf.org/en/home)" ], "alternates": { "markdown": "/en/news/articles/2023/02/02/cf-chinas-economy-is-rebounding-but-reforms-are-still-needed/index.md", "json": "/en/news/articles/2023/02/02/cf-chinas-economy-is-rebounding-but-reforms-are-still-needed/index.json", "bundleManifest": "/en/news/articles/2023/02/02/cf-chinas-economy-is-rebounding-but-reforms-are-still-needed/bundle-manifest.json" }, "generatedAtUtc": "2026-09-26T01:49:48.882Z" }