China is too big to rely on exports for growth, IMF chief warns

Subscribe to enjoy similar stories. BEIJING—The head of the International Monetary Fund warned China that its dominance over manufacturing risks exacerbating global trade tensions, urging Beijing to take far greater action to shift its economy toward domestic consumption. “As the second largest economy in the world, China is simply too big to generate much growth from exports," said IMF Managing Director Kristalina Georgieva on Wednesday.

Changes to its model are “now long overdue" and should be accelerated, she added. Georgieva’s pointed remarks in Beijing, part of an annual assessment by the IMF of China’s economy, came just days after the Chinese government disclosed that its trade surplus in goods topped $1 trillion for the first time, a milestone in economic history that has underscored the extent of its manufacturing dominance. In a country where the sophistication and speed of its factories are a point of pride, Beijing has tended to brush off criticism of its export-driven model, instead presenting itself as a victim of unjust protectionism by the U.S.

and others, and as a defender of open markets. But as China’s exports have surged to record highs, Beijing’s defense has increasingly fallen on deaf ears internationally, with some European nations joining the U.S. in their criticism of China’s tactics.

China’s exports, rising 5.4% in the first 11 months of the year compared with the same period a year earlier, have proven to be a bright spot in an economy that is beset by challenges. They include a persistently weak property market, high youth unemployment and lofty government debt levels. Depressed real-estate prices, coupled with a preference, especially among older Chinese, to save for rainy days, have held