People’s Daily Hails Deleveraging Campaign’s Progress


An opinion piece published by the flagship newspaper of the Chinese Communist Party has hailed the success of Beijing’s ongoing deleveraging campaign, while seeking to reassure markets that the economy will remain on a steady footing in the second half.

The opinion piece by Qin Chuan (秦川) cites data indicating that the rise in China’s leverage ratio for 2017 was 10.9 percentage points beneath the average per annum increase during the period from 2012 – 2016.

“Growth in the leverage ratio in the first quarter of this year narrowed by 1.1 percentage points compared to the same period last year,” wrote Qin.

“Deleveraging is seeing initial successes, and China is entering a period of stable leverage. With the total leverage ratio coming under effective control, the leverage structure is also displaying optimisation.

“Corporate sector leverage ratios are declining, state-owned enterprise debt-to-asset ratios have markedly fallen, the rate of increase in household leverage is marginally easing, the security of debt is under control, and government sector leverage ratios continue to decline.

“With regard to work in the second half, the CCP politburo has made things extremely clear, by unveiling for example the ‘six stables,’ being stable employment, stable finance, stable foreign trade, stable foreign investment, stable investment and stable expectations.

“[The government] is continuing to research and promote a series of major reform measures that are proving effective, and firmly containing rises in housing prices…we have sufficient reason to look forward to the future.”