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20:33, 27-Jul-2017
Official: China willing to sacrifice growth to manage systemic risks
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Policymakers in China are willing to sacrifice some short-term economic growth in order to deal with systemic risks, Yang Weimin, vice minister of the Office of the Central Leading Group on Financial and Economic Affairs said on Thursday.
"(China can't let smaller risks) eventually lead to large systemic risks that would cause serious harm to China's economy," Yang said.
"China would rather sacrifice in some other areas, but also deal with the relationship between stable growth and risk prevention," he added.
VCG Photo
VCG Photo
Yang said China can achieve both goals of maintaining steady growth while containing debt levels.
China's total private and public debt has exceeded 250 percent of its GDP, up from 150 percent before the global financial crisis, according to the Thursday report.
Although Chinese short-term borrowing costs have been pushed up by recently-launched finance regulators, the government's efforts to lower debt levels in the economy will be a long-term process and the key is to push state-owned firms to deleverage, Yang added.
"We cannot allow the leverage ratio to continue to rise in order to safeguard economic growth," he said.
China's economy grew a faster-than-expected 6.9 percent in the second quarter, matching the first quarter's pace, supported by solid exports, industrial production and consumption.
According to the report, China's steady growth in the first half could help hit the full-year target of around 6.5 percent and achieve even better results.
As Chinese higher market interest rates have started to trickle down to the real economy, Yang believes the economic outlook will not fall into the middle-income trap.
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