Nomura chairman advises China to focus on debt issue

World
Europe

02:16

Taking Japan's experience as a reference, China should tackle the debt issue as soon as possible to avoid further risks, Nobuyuki Koga, chairman of Nomura Holdings, told CGTN in an interview on the sidelines of the China Development Forum.

Japan had gone through rounds of debt problems but it did not respond to them until its economic bubble burst in the 1990s. It had therefore missed windows of opportunity for corrective actions, Koga said, adding that debt issues should be tackled when economic growth is still high.

Due to low economic growth, debt problems worsened and Japan had to take a longer time to fix them, he said.

Now China still has more room for growth but if it missed the window to fix its debt issues in time, the risks could be built up further, he said.

As for the opening-up of China's finance sector, Koga expected the country to launch more policy clarity and move more quickly on the yuan's globalization since global investors need more channels to enter yuan-denominated trading.

After China announced last year the scrapping of the stake limit for foreign financial ventures, Nomura filed for a new securities firm in China with a controlling stake.

He also said at a time when when the global policy environment is murky, China's opening-up policy sends a positive signal.

Nomura predicted the world economy will grow by 3.2 percent in 2019 and 3.5 percent in 2020.