The International Monetary Fund said China's slowing economyfaces significant downside risks and relies too much on investment,urging leaders to boost consumption and channel citizens' savingsaway from housing.

The IMF repeated an assessment that the yuan is “moderately”undervalued, which China disputed, the Washington-based lender saidin an annual review. The fund omitted an estimated range for thecurrency's undervaluation that was included in an earlier draft,according to two officials at the fund who had seen the previouslanguage and spoke on condition of anonymity.

The call to support consumer spending echoes priorities set byPremier Wen Jiabao's government, which is seeking to stem asix-quarter slowdown in economic growth. Leaders have cut interestrates and stepped up investment as the ruling Communist Partyprepares for a once-a-decade leadership handover starting laterthis year.