IMF Leader Expresses Concern Over China’s Role in Trade Dispute

IMF Chief Urges China to Curb Economic Intervention Amid Rising Trade Tensions

The head of the International Monetary Fund (IMF), Kristalina Georgieva, has called on China to scale back its state intervention, criticising the country’s heavy subsidies and persistent trade surpluses for contributing to global economic tensions.

In Washington, D.C., Georgieva warned that China should “pull back from too much intervention” and recommit to its longstanding aim of transitioning from a manufacturing-led economy toward one driven by services and domestic consumption.

“Countries must address the imbalances that fuel many of the tensions among major economies,” she said. “Some countries, like China, need to act to boost private consumption and embrace a shift to services. Others, like the U.S., need to reduce fiscal deficits.”

Georgieva outlined four priorities for China to modernise its economy:

1. Rebalance towards domestic consumption.

2. Resolve the ongoing crisis in the property sector and strengthen social protections to reduce excessive household saving.

3. Expand the services sector.

4. Reduce government intervention and allow the private sector to flourish.

Her remarks followed comments from U.S. Treasury Secretary Scott Bessent, who criticised the IMF for deviating from its core mission of addressing macroeconomic imbalances. Bessent accused the organisation of straying into “gender and social issues” instead of focusing on its primary economic role.

Meanwhile, tensions between the U.S. and China continued to escalate. Former President Donald Trump recently increased tariffs on Chinese goods to 145%, though exemptions were made for products like smartphones and laptops. Reports suggest he may reduce tariffs to between 50% and 65%.

China, however, has pushed back against Trump’s claims that trade negotiations between the two countries are ongoing. “Any suggestion about China-U.S. economic and trade negotiations is groundless and has no factual basis,” said He Yadong, a spokesperson for the Chinese Ministry of Commerce.

Despite Trump’s assertions that discussions are taking place daily, Chinese officials maintain that no formal negotiations are underway. The former president stated this week that he would make a decision on tariffs within the next two to three weeks, but that progress “depends on them.”

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