international monetary fund comments on China

They add:

  • China's regulators should reinforce primacy of financial stability over development goals
  • China should form a financial stability subcommittee citing lack of coordination and inadequate risk analysis
  • expansionary monetary and fiscal policies aimed at propping up employment and growth had led to a surge in debt among we corporate's and local government entities looking to prevent businesses from failing in their economies from floundering
  • the apparent primary goals of preventing large fails in local jobs in reaching regional growth targets have conflicted with other policy objectives such as financial stability
  • while China has been taking steps to address its debt risks reining in excessive credit growth will require ID emphasis on high GDP projections in national plans that have spurred local governments to set high growth targets
  • Banks need to hold more liquid assets

The IMF's report was based on findings by mission of visited China several times this year and also from earlier visits in 2015 and 2016.