## Press Briefing Transcript: China Article IV Consultation _IMF News, December 12, 2025_ ## Source details **Canonical URL:** [Press Briefing Transcript: China Article IV Consultation](https://www.imf.org/en/news/articles/2025/12/12/tr-12-11-25-press-briefing-on-china-article-iv-consultation-transcript) ## Other formats - [Markdown version](/en/news/articles/2025/12/12/tr-12-11-25-press-briefing-on-china-article-iv-consultation-transcript/index.md) - [Structured JSON version](/en/news/articles/2025/12/12/tr-12-11-25-press-briefing-on-china-article-iv-consultation-transcript/index.json) - [Bundle manifest](/en/news/articles/2025/12/12/tr-12-11-25-press-briefing-on-china-article-iv-consultation-transcript/bundle-manifest.json) ## Bibliographic details - Published: December 12, 2025 --- ### Outlook and macroeconomic summary - Growth projections: 5 percent in 2025 and 4.5 percent in 2026. - Revisions: upward revisions from the October World Economic Outlook of 0.2 and 0.3 percentage points for 2025 and 2026, respectively. - Global context: China is contributing about 30 percent to global growth; IMF global growth projection for 2026 is 3.2 percent. - Drivers in 2025: strong exports and welcome fiscal stimulus supported the 5 percent outcome; net exports contributed 1.1 percent of the 5 percent growth rate in 2025. - Near-term outlook: slight slowdown in 2026 driven by anticipated falling exports and the time required for domestic sources of growth to take hold. - Structural headwinds noted: slowing productivity growth, high corporate and public debt levels, decreasing returns to investment, and an aging population. ### Domestic imbalances, consumption, and the property sector - Persistent weak domestic demand driven in part by a shaky property sector, depressed consumer confidence, and deflationary pressures. - Real exchange rate: lower inflation relative to trading partners has produced significant real exchange rate depreciation, making exports cheaper and prolonging export reliance. - Property-sector fiscal estimate: fully resolving the property sector problem would require spending over the next three years 5 percent of GDP. - Interaction with consumption: unfinished real estate problems reduce household wealth and raise precautionary saving; addressing the property sector comprehensively should revive consumer confidence and support consumption. ### Policy recommendations — macroeconomic package - Overarching priority: pivoting from export-led to consumption-led growth is the IMF's central recommendation. - Recommended macro package: - Additional fiscal stimulus combined with further monetary policy easing and greater exchange rate flexibility. - Fiscal policy to prioritize strengthening the social protection system to reduce excess saving and boost consumption. - Specific social-policy suggestions: raise social spending, especially in rural areas; accelerate Hukou reforms to provide migrant workers with access to social benefits — IMF analysis suggests this could boost consumption by up to 3 percentage points of GDP in the medium term. - Greater exchange rate flexibility: a market-based exchange rate that can move in both directions, reflecting fundamentals (no explicit recommendation to appreciate the Renminbi was made). ### Policy recommendations — structural reforms and labor market - Structural reforms to lift medium-term growth: - Reduce regulatory burdens and lower barriers to internal trade, particularly in the services sector. - Level the playing field among firms and reduce distortions from industrial policy. - Implement labor market measures to reduce skill mismatches and youth unemployment. - Harness AI and energy-efficiency gains while mitigating labor market dislocations and new financial stability risks. - Labor market and youth employment: - Youth unemployment: 17 percent in October. - IMF policy advice: combine labor market flexibility with social protections ("flexicurity"), active labor market policies (job search and matching assistance, retraining programs), and service-sector opening to create job-rich opportunities. - On AI: IMF assessment finds about 40 percent of jobs globally will be impacted (enhanced, changed, or eliminated); large-scale skills and mobility measures are needed. ### Policy recommendations — public debt, financial oversight, and industrial policy - Debt and financial stability: - Years of high investment have left high public and corporate debt and elevated risks. - Government debt-swap program provides short-term relief; unsustainable local government debt will need restructuring. - Recommend reforms to strengthen financial-sector oversight, fiscal discipline, and transparency. - Industrial policy: - IMF findings: measured impact of industrial policy on productivity shows a loss of 1.2 percent due to resource misallocation. - Recommendation: scale back public support to selected firms and sectors where not justified; set a high bar for industrial-policy use. - Fiscal reallocation: savings from reduced industrial policy support could be redeployed to social spending and to resolve real estate sector problems. ### Quantified potential gains from policy implementation - IMF calculation of comprehensive progress on three priorities (boosting consumption, structural reforms, addressing debt): - Could raise China's GDP level by about 2.5 percent by 2030. - Could create some additional 18 million jobs by 2030. - Could reduce deflationary pressures, lead to real exchange rate appreciation, and produce a smaller current account deficit. ### External position and exchange rate - Current account and valuation references: - Year-to-date current account surplus noted in 2025: 3.3 percent of GDP (questioner citation). - Prior current account (2024) cited as 2.3 percent of GDP. - External Sector Report reference: IMF estimated the yuan was undervalued by 8.5 percent based on last year’s current account surplus. - IMF stance: - External-position assessment for 2024 was that China was moderately stronger than fundamentals implied; 2025 assessment is forthcoming in the 2025 Report. - Policy advice emphasizes greater nominal exchange-rate flexibility and macro policies focused on boosting domestic demand; no explicit recommendation to appreciate the Renminbi was made. ### Technology, AI preparedness, and spillovers - IMF preparedness index for AI: China ranks number one among emerging markets on four indicators (digital infrastructure, labor market adaptability, innovation diffusion, and regulation). - IMF view: significant opportunities from R&D and AI; recommend relying more on market-driven private bets and competition rather than oversized public bets to allocate resources. - Spillovers: China’s tech and green-technology advances (including EV adoption) are positive for global outcomes, but excessive industrial support can create misallocation and external imbalances. ### Trade tensions and global implications - Trade figures and concerns: - Reporter citation: China’s $1 trillion trade surplus referenced in questions. - IMF message: China’s continued reliance on exports risks provoking protectionist responses; accelerating the shift to domestic consumption would be beneficial for China and the global economy. - Contribution to global growth: IMF projects China will continue to contribute positively; "around 30 percent" contribution to global growth over the next couple of years is expected, though it may decline somewhat as the economy rebalances. *Press Briefing Transcript: China Article IV Consultation — December 12, 2025 (IMF Communications Department).* --- ## References - [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) - [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) _Source: https://www.imf.org/en/news/articles/2025/12/12/tr-12-11-25-press-briefing-on-china-article-iv-consultation-transcript_