Will deleveraging give way to steady growth? Response of the Deputy Governor of the Central Bank

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 Will deleveraging give way to steady growth? Response of the Deputy Governor of the Central Bank


Chen Yulu said that in the past few years, the macro leverage rate of our country has increased by an average of more than 10 percentage points per year, and the risk accumulation is very large and very fast. From 2016 to 2018, our macro-leverage rate fell, averaging only 5.8 percentage points. In 2018, the macro-leverage ratio not only did not rise, but also decreased. At present, we also hope that the leverage rate of enterprises, especially state-owned enterprises and local governments, will be reduced as soon as possible. Chen Yulu said that there are many unifications between structural deleveraging and steady growth, not opposites. Only when finance is stable will the economy be stable. Financial deleveraging also needs a stable economic environment, so that it can be promoted. For example, when the downward pressure of our economy was relatively high last year, the Peoples Bank of China lowered its benchmark successively, which provided substantial liquidity for the real economy in the medium and long term, and played a great role in stabilizing growth. Chen Yulu said that in the process of structural de-leveraging, the treatment of zombie enterprises is firm. On the one hand, the clearance of zombie enterprises can release the generated resources, on the other hand, it can also free up more financial resources for more efficient industries. Thus, it is conducive to the efficient growth of the real economy. Source: Beijing Youth Daily Author: Zhu Kaiyun Responsible Editor: Su Honghong_NBJ9980

Chen Yulu said that in the past few years, the macro leverage rate of our country has increased by an average of more than 10 percentage points per year, and the risk accumulation is very large and very fast. From 2016 to 2018, our macro-leverage rate fell, averaging only 5.8 percentage points. In 2018, the macro-leverage ratio not only did not rise, but also decreased. At present, we also hope that the leverage rate of enterprises, especially state-owned enterprises and local governments, will be reduced as soon as possible.

Chen Yulu said that there are many unifications between structural deleveraging and steady growth, not opposites. Only when finance is stable will the economy be stable. Financial deleveraging also needs a stable economic environment, so that it can be promoted. For example, when the downward pressure of our economy was relatively high last year, the Peoples Bank of China lowered its benchmark successively, which provided substantial liquidity for the real economy in the medium and long term, and played a great role in stabilizing growth.

Chen Yulu said that in the process of structural de-leveraging, the treatment of zombie enterprises is firm. On the one hand, the clearance of zombie enterprises can release the generated resources, on the other hand, it can also free up more financial resources for more efficient industries. Thus, it is conducive to the efficient growth of the real economy.