April 2, 2018 / 10:55 AM / a year ago

China to gradually cut macro-economic leverage ratio: state media

FILE PHOTO: China's President Xi Jinping claps after his speech as he and other new Politburo Standing Committee members meet with the press at the Great Hall of the People in Beijing, China October 25, 2017. REUTERS/Jason Lee/File Photo

BEIJING (Reuters) - China will gradually lower its macro-economic leverage ratio as part of measures to contain financial risks, state radio cited President Xi Jinping as saying on Monday.

Authorities are trying to walk a fine line by containing riskier types of financing and slowing an explosive build-up in debt without stunting economic growth.

“Local governments and enterprises, especially state-owned enterprises, must reduce their leverage as soon as possible and we will strive to achieve a stable and gradual decline in the macro leverage ratio,” state radio quoted Xi as saying.

“We should give priority to issues that may threaten economic and social stability and trigger systemic risks.”

China will resolve its debt risks by promoting high-quality growth and productivity, and will push forward structural deleveraging by targeting local governments and companies, Xi said.

“We must make overall plans and coordination to form concerted efforts and grasp the rhythm and intensity of the introduction of policies,” Xi was quoted as saying, calling for targeted measures to deal with risks in different markets.

Reporting by China monitoring desk and Kevin Yao; Editing by Jacqueline Wong, Robert Birsel

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