China says it met target for reducing debt levels
China has met its target for reducing debt levels but will continue to crack down on riskier and illegal types of lending to prevent systemic financial risks, the China Banking and Insurance Regulatory Commission said yesterday.
The comments came as investor worries about China's debt levels are on the rise again as Beijing ramps up efforts to support its slowing economy amid rising bad loans and record corporate defaults. Bank lending hit a record last month.
Though top officials have pledged not to resort to another massive spending spree like that during the global financial crisis, analysts say it is vital for the government to rekindle weak credit growth to avoid a sharper slowdown.
China has never revealed a specific target for its multi-year risk containment campaign and does not release comprehensive statistics on debt loads.
But the regulator said the leverage level in the economy had been growing by an average of more than 10 per cent a year before stabilising last year, according to an official handout ahead of a press briefing.
Regulators have been trying since the last downturn in 2015 to clamp down on riskier types of financing and an explosive build-up in debt which international monitors such as the International Monetary Fund say could trigger a banking crisis. - REUTERS