Aug. 2 – For the first time since 2006, the Chinese government allowed the International Monetary Fund to publish an Article IV annual review of the country’s economy this year – culminating in a gently worded 43-page report released by the Fund on Thursday.

In the report, the IMF praised China’s “quick, determined, and effective” response to the Global Financial Crisis which contributed “significant positive trade spillovers to the region and the global economy.”

The IMF also pressed the Chinese government to continue to actively address its massive trade surplus by promoting domestic consumption. The report claims that “ongoing structural reforms, rising wages, and the recent appreciation of the currency” are contributing to higher consumption levels in China, but that China “has still seen a secular decline in its consumption-output ration due to rising rates of precautionary savings and a rate of growth of household income that has not kept up with GDP.”

If China wishes to achieve a sustained rebalancing of its economy, the IMF believes that the following areas will need to see continued progress, namely: a stronger currency, financial liberalization and development, fiscal support for consumption, raising household income, healthcare, pensions, education, urbanization, and tackling high corporate savings.

The Article IV consultation, which the IMF generally gives to each of its members annually, was previously discontinued by Beijing over the Fund’s critical take on the Chinese exchange rate; calling it “fundamentally misaligned.” In order to get the go-ahead from the Chinese government, the fund agreed to take on a more diplomatic tone, calling the renminbi’s value “substantially below the level that is consistent with medium-term fundamentals.”

In the report, the Fund also forecasts that China will return to double-digit real GDP growth this year after a two year respite with a rate of 10.5 percent before dropping off to a rate of 9.6 percent next year.