Moody's says that an increase in China's credit efficiency of growth is key to reducing leverage while meeting official growth targets and preventing a sharp increase in defaults.
- Says China's National Financial Work Conference (this the country's financial policy direction every five years, and which concluded on 15 July 2017) has demonstrated a refreshed commitment to facilitate reforms to curb leverage among state-owned enterprises, companies as a whole, and the broader economy, to avoid the risk of a financial crisis
- "The Chinese authorities will balance the competing aims of short-term, credit-fueled growth - which they target at around 6.5% in 2017 - and long-term policy measures to increase the resilience of the financial system and to reduce and eventually reverse the growth of leverage in the economy," says Michael Taylor, a Moody's Managing Director and Chief Credit Officer for Asia Pacific.
