IMF Staff Country Report-People's Republic of China: 2023 Article IV Consultation-Press Release

February 2, 2024--Summary:
China has enjoyed decades of impressive growth, which has significantly improved living standards and largely eradicated extreme poverty. The growth has, however, been accompanied by widening imbalances and rising vulnerabilities, as excessive investment in infrastructure and housing has resulted in rising debt levels among property developers, local governments (LG), and local government financing vehicles (LGFVs).

The authorities have proactively sought to contain developer leverage. This has contributed to a significant, but needed, adjustment in the property market that continues to weigh on economic activity, including through its impact on LG finances.

Amid these structural challenges, the authorities have appropriately announced their goal to transition to high quality growth while tackling risks from the property sector and LG debt.