China's resilient economy offers "positive spillovers" for rest of world amid global shocks: IMF chief

China's economy remains resilient and holds significant growth potential in spite of the widespread impact of the Middle East conflict, Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva said on Wednesday, adding that China's strong performance will continue to deliver "positive spillovers" for the world economy.

Despite the global economic turmoil brought by the U.S.-Israeli war on Iran, data from China's National Bureau of Statistics (NBS) on Thursday showed the country's gross domestic product (GDP) grew 5 percent year on year in the first quarter of 2026, 0.5 percentage points faster than that of the fourth quarter of 2025.

The latest figures offer an encouraging sign the country is on the right track and comes after Chinese lawmakers last month set an economic growth target of 4.5 to 5 percent for the year.

Speaking at a press conference during the ongoing IMF Spring Meetings in Washington, D.C., Georgieva emphasized that the Chinese economy has demonstrated clear resilience amid the current global turbulence and said it continues to offer enormous potential as a driving force for other markets.

"We do see resilience in the economy. China has great potential. As it moves to change its growth model from one that is mostly dependent on exports to one that is primarily oriented towards domestic consumption, moving from goods to services, that can give a big boost to China. And, of course, China's size means that when China does well, there are positive spillovers for the rest of the world," she said.

During the press conference, Georgieva noted the war in the Middle East has already delivered a severe blow to the global economy with energy markets and supply chains badly hit, particularly as a result of the disruption along the Strait of Hormuz, a vital shipping passageway which has become a focal point for the conflict.

Some economies heavily reliant on imports from the Gulf region are already facing supply shortages, including oil, natural gas and related raw materials which are typically transported through the Strait of Hormuz, the IMF chief warned.

Georgieva also pointed to the potential long-term pain which lies ahead, saying that even if the conflict ended immediately, supply chains would not recover at once.

As a result of these uncertainties, the IMF has lowered its 2026 global growth forecast in its latest World Economic Outlook. It now projects growth will slow to 3.1 percent this year, down from the 3.4 percent seen in 2025.

China's resilient economy offers "positive spillovers" for rest of world amid global shocks: IMF chief

The ripple effects of tensions in the Middle East have now spread to the major eastern Chinese trading hub of Yiwu, a city famously known as "the world's supermarket," as companies and traders try to work around the disruption and rely on strong logistics networks across the region to keep business moving.

The Yiwu International Trade Market has become an important center for foreign trade, housing nearly 80,000 booths offering over two million types of commodities. However, the recent situation brought by the U.S.-Israeli war on Iran and the disruption it has caused to both shipping transport and air cargo is forcing some traders to take steps to mitigate the impact.

Zhang Shidan, a plastic household goods trader in Yiwu, said her company has been left with no choice but to raise product prices as transportation and insurance costs have surged due to escalating tensions in the Middle East.

"We will adjust prices after the stocks of most products run out. The prices are expected to rise by 10 percent," Zhang said.

The travel turmoil brought by the conflict has also created a headache for customers from the region who are trying to reach Yiwu themselves.

"We flew from Lebanon to Egypt, from Egypt to Dubai, from Dubai to Hangzhou. It's a long time. Because in [the main] Lebanon airport, only one company can fly -- a Middle East company -- so its expensive," said Heysam Yassine, a Lebanese buyer.

While making the trip from the Middle East to Yiwu has become more difficult, logistics companies with well-established supply chain networks across the region are helping to cushion the impact on trade and working to distribute goods as best as they can.

"We have 28 warehouses across 12 countries in the Middle East, so we have a relatively complete layout in the region," said Chen Fangfang, general manager of Safe Way Express Cargo, a logistics and cargo shipping firm.

Last year, the total value of Yiwu's exports reached over 100 billion U.S. dollars, with more than 14 billion U.S. dollars going to Middle Eastern markets.

Traders in Yiwu look to work around Middle East disruption, rely on strong logistics networks