One of the China Banking Regulatory Commission’s senior-most official says the country’s economy could face tough times ahead.
Yu Xuejun (于学军), chair of CBRC’s Key Financial Institution Supervisory Commission said at the Caijing Annual Conference on Wednesday that the Chinese economy faces major downwards pressure, and expects this to be be reflected at the start of next year and the first quarter of 2018.
“We should remain alert amidst an atmosphere of optimism, and make advance adjustments and micro adjustments,” said Yu. “[We should] make relevant preparations in advance.”
According to Yu the main reason that the Chinese economy will come under pressure lies in the excessive strength of the stimulus policies previously employed by the government, as well as rapid monetary and credit expansion.
Yu said that the adverse side-effects of these policies would include asset bubbles, a rapid swelling of financial sector balance sheets and the accumulation of large amounts of risk, as well as an increase in potential inflation risk.