The IMF Working Papers series is designed to make IMF staff research available to a wide audience. Almost 300 Working Papers are released each year, covering a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and national and international economic developments.
Real imports in China have decelerated significantly over the last two years to below
4 percent (yoy) from double-digit growth in previous years. Weaker investment, partly
due to progress in rebalancing from investment to consumption, has been the main factor
accounting for about 40-50 percent of slowdown during this period. Weaker exports also
account for about 40 percent of slowdown, of which about a quarter is due to stronger
RMB. Onshoring-substitution of imported intermediate inputs with domestic
production-has not been an additional drag over this period but it continues to slow
import growth at a similar pace as previous periods. There is large uncertainty about the
impact of rebalancing on the import slowdown due to difficulties in identifying the
counterfactual nonrebalancing path.