China to balance stable growth and risk prevention - PBOC

BEIJING (Reuters) - China will strike a balance between stabilising economic growth and preventing risks, even as debt was allowed to temporarily rise this year to support the coronavirus-hit economy, the head of the central bank Yi Gang said on Wednesday. Yi, the governor of the People's Bank of China (PBOC), told a financial forum in Beijing that he expected China's macro leverage ratio to stabilise next year as the economy expands, after the debt gauge rose in 2020. Bank lending in the first nine months totalled 16.26 trillion yuan ($2.44 trillion) as policymakers looked to reboot economic activity, beating a previous peak of 13.63 trillion yuan in the same period last year

Reuters October 22, 2020 00:06:21 IST
China to balance stable growth and risk prevention - PBOC

China to balance stable growth and risk prevention  PBOC

BEIJING (Reuters) - China will strike a balance between stabilising economic growth and preventing risks, even as debt was allowed to temporarily rise this year to support the coronavirus-hit economy, the head of the central bank Yi Gang said on Wednesday.

Yi, the governor of the People's Bank of China (PBOC), told a financial forum in Beijing that he expected China's macro leverage ratio to stabilise next year as the economy expands, after the debt gauge rose in 2020.

Bank lending in the first nine months totalled 16.26 trillion yuan ($2.44 trillion) as policymakers looked to reboot economic activity, beating a previous peak of 13.63 trillion yuan in the same period last year.

"Monetary policy needs to guard the 'gates' of money supply, and properly smooth out fluctuations in the macro leverage ratio, and keep it on a reasonable track in the long run," Yi said.

In July, Ruan Jianhong, head of the PBOC's statistics department, said that the country's macro leverage ratio jumped 14.5 percentage points in the first quarter and climbed further in the second quarter.

The macro leverage ratio is a measurement of the debt held by Chinese governments, households and companies divided by total gross domestic product (GDP).

The central bank has not given further details on the figure.

The Institute for International Finance (IIF) said in July that China's debt-to-GDP ratio was on track to hit 335%, from nearly 318% in the first quarter.

At the same forum, PBOC Vice Governor Pan Gongsheng said that the central bank had prepared a draft to improve macro prudential assessments, which measure weaknesses in financial systems, for the property finance sector.

PBOC will look into indicators including the concentration ratio of property loans, the ratio of household debt to total income, and the risk-weighting of property loans, said Pan.

A list of China's systemically important banks, and detailed regulations for them, will be revealed in the near term, he added.

Also at the forum, Vice Premier Liu He said the economy will very likely grow this year, adding that prudent monetary policy should be kept appropriate and flexible, and liquidity reasonably ample.

On Monday, China reported its GDP grew 0.7% in January to September from a year earlier, versus a contraction of 1.6% in the first half following the coronavirus outbreak.

Speaking on a separate panel at Wednesday's forum, Yi warned that financial technology, while making services more convenient, has created data gaps and faces problems when it comes to protecting business secrets and personal privacy.

Public and government information "must be more transparent... (but) what must be protected must be protected," he said.

($1 = 6.6551 Chinese yuan renminbi)

(Reporting by Binbin Huang, Cheng Leng and Ryan Woo; additional writing by Tom Daly; Editing by Kim Coghill and Christian Schmollinger)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.