U.S.-China Relations

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       I.M.F. Is Upbeat on China’s Growth but Questions Industrial Policy

       Surging exports and factory investment are buoying China’s output, but the housing market faces serious troubles and industrial policies may hurt other countries.

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       An electric car factory in Ningbo, China, in April.Credit...Gilles Sabrié for The New York Times

       By Keith Bradsher

       Reporting from Beijing

       May 28, 2024

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       Responding to China’s surging exports and extensive investments in new factories, the International Monetary Fund made sizable increases on Wednesday in how much it believes China’s economy will grow this year and next.

       The I.M.F. now estimates that China will grow 5 percent this year and 4.5 percent in 2025. That is 0.4 percentage points more for each year compared with the fund’s predictions just six weeks ago.

       China’s gross domestic output expanded 5.2 percent last year as the economy rebounded following nearly three years of stringent pandemic policies that included numerous municipal lockdowns and mandatory quarantines. Many economists, including at the I.M.F., had anticipated that growth would falter this year because of a severe contraction of China’s housing market and a slowdown in domestic spending.

       Yet while property prices continued to fall and retail sales grew sluggishly, China’s economy powered ahead instead in the first three months of this year, expanding at an annual rate of about 6.6 percent because of booming exports and strong factory investments.

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       The Chinese government is taking steps to address the housing crash, but it faces enormous challenges. Years of overbuilding have resulted in four million new but unsold apartments and, by one conservative estimate, as many as 10 million that developers have sold but not finished building.

       Many owners of vacant apartments now find themselves facing years of hefty mortgage payments but little chance the apartments will appreciate significantly in value.

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       Keith Bradsher is the Beijing bureau chief for The Times. He previously served as bureau chief in Shanghai, Hong Kong and Detroit and as a Washington correspondent. He has lived and reported in mainland China through the pandemic. More about Keith Bradsher

       See more on: International Monetary Fund

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