WASHINGTON — China has capacity and confidence to control systemic risks while maintaining steady growth, said Zhou Xiaochuan, governor of the People’s Bank of China (PBOC) on Oct 14.
“The Chinese government has the capacity and confidence to prevent systemic risks and maintain healthy and stable economic operations,” said Zhou in a statement sent to the International Monetary and Financial Committee (IMFC) meeting.
According to the central bank official, China has set financial risks control as a top priority, and has taken measures to control risks in shadow banking, reduce corporate leverage, and prevent property market overheating in some areas.
“In recent years, due to factors such as the economic slowdown, structural adjustment, and high volatility in the international financial markets, the potential risks in China’s financial industry have increased, but in general, the risks are manageable,” said Zhou.
In order to ensure steady growth while avoiding the rise of systemic risks, China will continue to maintain stability and continuity of its macroeconomic policies, said the official.
Chinese economy grew at a fast pace of 6.9 percent in the first half of this year, with consumption and services sector contributing major share of the economic growth.
In view of the better-than-expected growth, the International Monetary Fund (IMF) upgraded its forecasts for Chinese economic growth in this year and next year to 6.8 percent and 6.5 percent respectively.
IMF chief Christine Lagarde said at a news conference during the IMF/World Bank annual meetings that the IMF welcomed China’s decisions to tame and reduce credit growth. She suggested China should continue the policies to rein in credit growth in order to prevent financial risks.