The International Monetary Fund (IMF) has issued a warning regarding China's economy, which heavily relies on exports and investments. The IMF's executive board discussed China's economic outlook and stated that the country must prioritize a transition to a consumption-driven growth model. This change is essential as the current model increases external imbalances, which can have adverse effects on its trading partners. The report highlights that the uncertainty of tariffs and trade conditions could further impact China's economic performance and forecasts a slowdown in the country's GDP growth from 5% last year to 4.5% this year.

The report also underscores the significant scale of China's trade surplus, estimated at 3.3% of GDP last year, and emphasizes that one-third of the economic growth in the past year stemmed from net exports. However, such a growth model raises concerns of overproduction of Chinese goods, potentially leading trading partners to take preemptive measures that could endanger Chinese exports. The IMF repeatedly pointed out the term 'external imbalance' 15 times in the report, suggesting a serious warning against the risks associated with China's export-driven growth.

Additionally, the IMF criticized China's industrial policies, including state subsidies, noting that government spending on key industries reached approximately 4% of GDP in 2023, compared to only 1.5% in the European Union in 2022. The report recommended reducing such 'unjust' industrial policies and aimed to decrease the state subsidy proportion to 2% in the medium term. It also raised alarms concerning the risk of deflation, citing the lack of domestic demand as a pressing issue leading to price declines, thereby further complicating China's economic landscape.