China is ready to sacrifice economic growth to manage systemic risks

Almaty. July 28. Silkroadnews – China is ready to sacrifice economic growth to manage systemic risks, Reuters reported.
“A senior Chinese economic official on Thursday indicated that policymakers would be willing to sacrifice some short-term economic growth in order to deal with systemic risks. Beijing is trying to contain rising debt and defuse property bubbles amid fears such risks could derail the world’s second-largest economy if not handled well”, the report reads.
At the same time, it is noted that China is ready to sacrifice growth in some areas rather than allow the smaller risks to lead to large systemic risks that would cause serious harm to China’s economy.
According to the Organization for Economic Cooperation and Development (OECD), China’s total private and public debt has exceeded 250% of GDP, compared to 150% before the global financial crisis. Chinese regulators have already started fighting against riskier types of financing, but such a step provoked an increase in the short-term borrowing costs.
According to the publication, in the second quarter of 2017 China’s economy grew faster than expected by 6.9%, supported by solid exports, industrial production and consumption. However, analysts expect that growth will slow in the second half of the year, as the real estate market slows and commercial costs rise. According to government officials, steady economic growth in the first half of the year can provide an average annual growth of around 6.5%. At the same time, China will carefully adjust its monetary policy to compensate for the changes in market interest rates. According to the Central Bank of China, the weighted average lending rate of non-financial firms in China increased by 26 basis points in the first quarter to 5.53%. Data for the second quarter should be submitted in early August.