China’s debt problems will see significant improvements in the next three years, the department head of a government think tank said.

“The nation’s overall debt levels have not grown to dangerous levels. The government is keeping a close watch on the debt problems, especially those caused by the large State-owned companies,” Li Yang, director of the National Institution for Finance and Development of the Chinese Academy of Social Sciences, said during the Boao Forum for Asia Annual Conference 2018 on April 9.

He added that China remained confident on dealing with the debt problems and major improvements would be seen within three years.

His comments are in line with earlier remarks by Vice-Premier Liu He during the Davos Forum in Switzerland, that China has concrete plans to rein in its mounting debt.

In the past few years, China’s massive credit expansion had fueled double digit growth which outpaced that of many developed countries, but led to concerns over risks from debt pileups, with a large proportion of that debt arising from State-owned enterprises.

Since then, the government has introduced several measures to lower leverage and curb risks.

It has also issued policies to cool the housing market and kept a close watch on the steady growth in household debt.

The measures introduced to tackle debt problems have started to bear fruit as seen in the recent economic data, Li said.

Although China’s debt-to-GDP ratio continued to increase in 2017, it grew at a slower pace－much slower than the growth pace compared to 2008, according to Li.

The non-financial corporate debt over the national economic output slipped by 1.3 percentage points in 2017 compared to the level in 2016, a report by the think tank showed.

Although some worries still persist on China’s debt problems, for instance, banks’ bad loans, the silver lining comes from China’s high savings rate and small amount of external debt, according to Leslie Maasdorp, vice-president of the New Development Bank.

Looking ahead, the key for China is to continue implementing reforms to achieve high quality growth and also deal with income inequality, according to Massdorp.

Hans-Paul Bürkner, president of Boston Consulting Group, said with a relatively high savings rate, efforts to implement economic rebalancing are expected to support the economy maintain a robust growth.