China's debt level rises to record low amid economic recovery

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China's debt level rises to record low amid economic recovery

The PHOTO XINHUA China has made a rapid economic recovery with a mild increase in debt levels since the start of the COVID-19 epidemic, leaving ample policy space to sustain a steady economic performance, officials and experts said on Thursday.

The rise in the nation's debt-to- GDP ratio was pronouncedly lower than in other major economies from 2020 to 2021, according to Chen Yulu, vice-governor of the People's Bank of China.

The announcement was made by the Publicity Department of the Communist Party of China Central Committee at a news conference hosted by the Communist Party of China in 2012 to review developments in the financial sector since the 18th National Congress of the CPC in 2012.

The Bank for International Settlements, the Bank for International Settlements, reported the average leverage ratio of all reporting countries, at 264.4 percent, up 18.3 percentage points from the end of last year.

In China, the increment was 16.5 percentage points during the same period, Chen said.

The central bank's calculations pointed out that China's macro policy stance of not flooding the market and shunning excessive money supply was the reason for the smaller increase in the ratio, which came in at 272.5 percent at the end of last year.

The central bank would boost support for the economy, implement relevant measures at an early date, and build a mechanism to boost lending to smaller businesses, according to Chen.

The speech came after President Xi Jinping said on Wednesday that China will step up macroeconomic policy adjustment while speaking at the opening of the BRICS Business Forum.

China will adopt more forceful measures to meet the economic and social development goals for the whole year, Xi said.

With a controllable debt level, China has ample policy space to drive economic growth, said Channel Yeung, a market analyst at FXTM who believes there is a growing possibility of reductions in interest rates and the reserve requirement ratio in the second half of the year.

The commission will firmly forestall systemic and regional financial risks because policymakers will emphasize growth stabilization and risk prevention, as said by Xiao Yuanqi, vice-chairman of the China Banking and Insurance Regulatory Commission.

The commission has urged the local banking regulator to do its duty and cooperate with local authorities in order to protect customers' rights, he said, adding that the risks facing Chinese small and medium-sized banks remain well under control.

The country's commitment to further financial opening-up was reiterated by officials at the news conference on Thursday.

Chen said that the financial sector will prepare for China's application to join the Comprehensive and Progressive Agreement on Trans-Pacific Partnership and the Digital Economy Partnership Agreement, and will facilitate foreign investors' participation in China's financial markets.

Overseas investors had grown their holdings of onshore renminbi-denominated financial assets by 240 percent compared to a decade ago, and their investment in Chinese securities has exceeded $2 trillion, official data showed.