The International Monetary Fund has just released its latest yearly report on China, calling on authorities to rebalance the economy toward consumption as the old investment and export-led growth model “now faces challenges.” With domestic demand in a funk due to the ongoing property slump, the Fund notes that China has relied on exports to drive growth, “with adverse spillovers to trading partners” — a rather more polite critique than US President Donald Trump has leveled against China’s trade practices. “China’s large economic size and heightened global trade tensions make reliance on exports less viable for sustaining robust growth going forward,” the report warns. It goes on to list various prescriptions — from scaling back industrial policies to raising social spending — to help rebalance growth toward domestic demand.

Full report : China Should Shift Economic Gears to Consumption-Led Growth, IMF Says.