The IMF is responding to Chinas global dominance of trade and Trillion plus trade surpluses with a prescription for China that it thinks China should follow.
The IMF has always sought to prescribe how competitors to its primary sponsors should 'develop' their economies- the IMF is a tool of US imperialism and China has never followed its forked tongue prescriptions- that is why today China represents an existential challenge to the global hegemony of the USA.
So lets look at the WSJs account of how China should fix its 'flawed' economy as defined by the IMF.
My commentary is inserted in italics.

The Prescription for China’s Ailing Growth ModelThe Prescription for China’s Ailing Growth Model

By Lingling WeiBy Lingling Wei

Feb. 24Feb. 24

A copper-wire production line in Ganzhou, Jiangxi province. Florence Lo/Reuters

For years, the global consensus has been that China is standing at a crossroads. But by 2026, that metaphor feels outdated. China is effectively trapped in a cycle of overproduction, making a surplus of goods that the rest of the world can no longer absorb without destabilizing their own industries.

By destabilising thier own industries what is meant exactly? Chinas productive sector is the most competitive in the world and it has to be for China to dominate global trade in manufactured goods and commodities' Chinas approach is mercantile.

I recently spoke with experts at the International Monetary Fund, who put the problem bluntly: China is simply too big to keep exporting its way out of its own internal malaise.

As Thomas Helbling, deputy director at the IMF’s Asia and Pacific division, said, “China, as we say, is a very large economy. Net exports should not be a major source of demand. Otherwise it will put too much of a burden on the rest of the world.”

How is it a burden on the rest of the world to be producing manufactured goods at the lowest price and buying commodities at the best price? It isn't it simply means that for most countries China and trade with it have become extremely important because they benefit hugely from it- even if their ability to compete with China is eroded. Sorry Chuck but that's free market capitalism.

The IMF’s latest “economic physical” of the country—the Article IV consultation—offers an urgent, if painful, prescription: stop relying on factories and start relying on people. The way forward is a forceful pivot toward a consumption-led model. This means trading massive industrial subsidies for a stronger social safety net, giving households the confidence to spend rather than save for a rainy day.

This argument about subsidies is hilarious. The IMF who have forced many other countries to privatise state assets and cut social welfare support is now telling the most competitive economy on earth to introduce welfare support for consumers but cut alleged subsidies for producers- in other words reduce its trade surplus in exchange for increased internal consumption and at the same time reducing its competitiveness with the IMFs prime sponsors.

Without it, the IMF warns China could slip into a “macro-financial feedback loop”—essentially a downward spiral where a crashing property market and mountain of debt feed off each other, creating a permanent chill of falling prices known as entrenched deflation.

The Chinese property market has crashed already-alternative options for citizens to invest in are needed and being developed- Chinas culture is one with a heavy emphasis on saving and that emphasis on self reliance and prudence is something the IMF advises against- these fiat debt slavery bankers sure know their stuff- but China is not going to start listening to their forked tongues now- it only got to this point by ignoring them.

The Elephant in the Room

A critical component of the IMF’s roadmap is a one-off central government support package for the property sector, which it estimates would cost approximately 5% of GDP over three years. This is a massive commitment--roughly 7 trillion yuan (worth about $1 trillion)--intended to restructure the system by finally completing the millions of pre-sold homes that currently sit like ghosts across Chinese cities.

The IMF wants the Chinese government to move from support for the productive sector to support for housing market price speculation- what happened to letting the free market take its course and allowing a new equilibrium to establish according to market supply and demand?

By protecting homebuyers and forcing the orderly exit of zombie developers, Beijing could finally break the paralysis that has seen consumer confidence crater since 2019.

Without these steps, Helbling warned, the adjustment “will take longer, will continue to weigh on confidence, and will continue to hold back household spending.”

Ending Industrial Policy

The rebalancing effort must also tackle “involution”—a term used in China to describe a race to the bottom where destructive price competition is hollowing out sectors like electric vehicles. While Beijing has launched an anti-involution campaign, it is still doubling down on industrial policy for new darlings like robotics and artificial intelligence.

China deliberately directs capital toward strategic technological development - the USA is now belatedly follwing this example- and the IMF now pleads with China to cease support for strategic productive sectors- clowns.

“While the anti-involution campaign is welcome, continued industrial policy support in other sectors perpetuates a cycle of overcapacity,” Sonali Jain-Chandra, the IMF’s China mission chief, told me. In other words, the glut doesn’t disappear; it just migrates from old industries to new ones.

True resolution requires Beijing to stop picking winners and start letting losers fail. As Jain-Chandra put it, the government must finally “let go of those unviable firms that are not able to stand on their own on a commercial basis.”

Currency as a Shock Absorber

To support this economic surgery, the IMF is pushing for greater exchange-rate flexibility. The goal is to let the renminbi act as a natural shock absorber. Instead of forcing the domestic economy to absorb every global hit through painful wage freezes or price cuts, a flexible currency value can fluctuate to dampen the impact of external shifts.

Jain-Chandra noted that “getting inflation back up to higher levels will be a big part of closing the real exchange-rate gap.”

Think of a currency’s “real” value as a combination of the exchange rate and the local cost of living. By reflating the economy and nudging domestic prices upward, China can align its currency with the rest of the world without needing a volatile, sudden jump in the official exchange rate.

While Beijing often prioritizes a stable currency to prevent it from moving too far, too fast, Helbling pointed out that such stability could also potentially lengthen the deflationary cycle.

In other words, if the currency isn’t allowed to weaken to reflect economic reality, the pressure is forced inward—leading to falling prices and vanishing corporate profits. This effectively traps the country in a downward spiral where the only way to stay competitive is to keep getting cheaper.

The counter to this is fixing the exchange rate gives certainty to producers who export. The IMF wants to discourage and erode Chinas global trade dominance on the grounds of somehow 'protecting' Chinese consumers and workers- but Chinas workers already enjoy constantly falling prices for goods and services so low age growth due to deflation is not harming them.

Investing in People over Factories

To truly restore balance, Beijing must stop treating the social safety net as a cost and start treating it as an economic engine. The IMF recommends a dramatic surge in rural social spending to lower the “precautionary savings” that currently starve domestic demand.

Reminiscent of the 'advice' Japan was given and we all know how that turned out for Japan

Jain-Chandra said China can fund this effort by cutting back on “the excessive investment that is now yielding diminishing returns.”

The IMF is horrified how China is investing globally in strategic infrastructure eroding the wests legacy hegemony. Tough shit.

Beijing’s new five-year plan talks a good game about boosting demand. But IMF officials say rhetoric isn’t enough.

As Jain-Chandra told me, “This transition requires more urgent and forceful expansionary macroeconomic policies ... and a scaling back of inefficient investment and unwarranted industrial policy support.”

For both China and the rest of the world, Beijing’s choice is deeply consequential. Without these reforms, the IMF expects China’s growth to slow to 4.5% this year and potentially slide toward 3.4% by the end of the decade.

A successful pivot would transform China into a massive new source of global demand. A failure, however, would likely mean more “exported” deflation and intensified trade tensions—leaving global partners to navigate the fallout of a stalled superpower.

So the IMFs sponsors (USA and Jewish bankers) want China to subsidise the wests uncompetitive export sectors while at the same time the west has imposed tariffs on China to protect these uncompetitive western manufacturers and producers and USA is pumping unprecedented subsidies into its own crumbling industrial sector. More self serving duplicity from the IMF.