U.S. Treasury Secretary Calls for Tougher Stance on China from IMF and World Bank

On October 17, 2025, U.S. Treasury Secretary Scott Bessent urged the International Monetary Fund (IMF) and the World Bank to adopt a more stringent approach towards China's state-driven economic practices. In a statement delivered to the IMF's steering committee, Bessent emphasized the need for the IMF to enhance its surveillance of member countries, particularly focusing on the economic imbalances exacerbated by China's industrial policies. He called for the World Bank to cease its support for China and redirect resources to nations facing more acute development needs.

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Bessent's remarks reflect a broader U.S. concern regarding China's economic strategies, which successive administrations have criticized for contributing to global trade imbalances. He stated, "The IMF should not shy away from asking difficult questions... explaining their potential harmful spillovers, and recommending appropriate corrective actions." This call for action comes amid ongoing tensions between the U.S. and China, particularly over trade policies and export restrictions.

Reuters

Bessent also criticized the IMF for its handling of debt restructuring negotiations involving China, the world's largest bilateral lender. He pointed out that China's insistence on involving multilateral development banks in debt restructurings for countries like Chad, Zambia, and Sri Lanka has delayed necessary financial relief, worsening liquidity issues for these nations. He remarked, "IMF programs cannot be effective if there are creditor countries... exacerbating the very liquidity stress that IMF programs seek to address."

ReutersIMF Chief Urges U.S. and China to Ease Trade Tensions to Safeguard Global GrowthIMF chief hopes for easing of US, China tensions to avoid hit to global economyU.S. Treasury Secretary Bessent urges IMF, World Bank to take tougher line on ChinaIMF Chief Calls for Easing U.S.–China Tensions

IMF Managing Director Kristalina Georgieva acknowledged the need for improved scrutiny of global economic imbalances and confirmed that the IMF is already working to enhance its surveillance mechanisms. She expressed optimism about the resilience of the global economy but noted that persistent uncertainties, particularly related to U.S.-China relations, could hinder growth.

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Georgieva warned that escalating trade tensions could have significant repercussions, stating, "Any sustained escalation between the United States and China could significantly hinder growth, disrupt trade, and heighten financial volatility." The IMF has projected a modest increase in global GDP growth to 3.2% for 2025, but this outlook does not account for the latest trade threats.

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The ongoing U.S.-China tensions have raised concerns about their impact on emerging markets, particularly in Asia. The IMF's Asia and Pacific director, Krishna Srinivasan, indicated that increased tariffs and supply chain disruptions could lower global growth by 0.3 percentage points. Emerging economies are particularly vulnerable to these tensions, which could affect trade balances and inflation rates.

Taipei TimesIMF Chief Calls for Easing U.S.–China TensionsIMF chief hopes for easing of US, China tensions to avoid hit to global economyIMF Chief Urges U.S. and China to Ease Trade Tensions to Safeguard Global GrowthIndia a bright spot in a fragmented global economy, but must deepen trade ties: IMF MD Kristalina Georgieva

Bessent's recommendations for the World Bank include curbing anti-competitive practices by Chinese state-owned enterprises and reassessing its commitment to climate-related financing. He urged the institution to adopt a more diversified energy financing approach, reflecting the complexities of global energy needs.

Reuters

• “The IMF should not shy away from asking difficult questions, more clearly highlighting internal and external imbalances, deepening its understanding of how industrial policies in large economies such as China contribute to those imbalances, explaining their potential harmful spillovers, and recommending appropriate corrective actions,” — Scott Bessent, U.S. Treasury Secretary

Reuters

• “Any sustained escalation between the United States and China could significantly hinder growth, disrupt trade, and heighten financial volatility,” Georgieva stated.” — Kristalina Georgieva, IMF Managing Director

IMF Chief Calls for Easing U.S.–China Tensions

• “In these situations, IMF programs cannot be effective if there are creditor countries within the membership that are exacerbating the very liquidity stress that IMF programs seek to address,” — Scott Bessent, U.S. Treasury Secretary

Reuters

The call for a tougher stance on China by U.S. officials underscores the growing tensions between the two largest economies and their potential implications for global economic stability. As the IMF and World Bank navigate these challenges, the focus remains on fostering cooperation and addressing the underlying issues that contribute to economic imbalances.

Reuters