China’s recovery is well advanced but it lacks balance and momentum has slowed, the International Monetary Fund (IMF) said in a report on Friday.
“The slowdown is attributed to the rapid withdrawal of policy support, the lagging recovery of consumption amid recurrent COVID-19 outbreaks despite a successful vaccination campaign, and slowing real estate investment following policy efforts to reduce leverage in the property sector," the IMF said after 2021 Article IV consultation with China.
The Chinese economy was expected to show an expansion of 7.9% in 2021, but then slow down to 4.8% in 2022, it added.
The IMF stressed that structural reforms have progressed unevenly across some key areas.
"While China’s climate strategy has begun to take shape with the release of detailed action plans, there was little or no progress in key real-sector reforms, including in the area of state-owned enterprises and competitive neutrality between private and state-owned firms," it said.