China vowed on Tuesday to contain high company debt levels and further cut excess coal and steel capacity in the country in a bid to ensure balanced economic growth and prevent asset bubbles.
Xu Shaoshi, chairman if the National Development and Reform Commission (NDRC), said at a news briefing in Beijing that the economy continues to face some challenges, Reuters reports.
“Although the domestic economy is stable and improving, it still faces contradictions and problems,” the official said.
To resolve the problems, authorities won’t allow debt of non-financial firms to rise beyond current levels, and will step up efforts to encourage companies to restructure their debts, Xu said.
China’s corporate debt has soared to 169 percent of gross domestic product.
The world’s second-largest economy likely grew around 6.7 percent last year — roughly in the middle of the government’s target range.
China’s leaders are likely to accept growth this year of around 6.5 percent, policy insiders say.
That should give the government more room to focus on tackling the nation’s debt pile, and on tamping down speculation that was seen last year in the housing, commodities and debt markets.
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