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Deleveraging conducive to China's economy in long term

December 6, 2018


Abstract : Although China's deleveraging push may slow growth in the short term, it will be conducive to the country's economy in the long haul, China Daily reported Thursday, citing Bridgewater Associates founder Ray Dalio.

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BEIJING, Dec. 6 (Xinhua) -- Although China's deleveraging push may slow growth in the short term, it will be conducive to the country's economy in the long haul, China Daily reported Thursday, citing Bridgewater Associates founder Ray Dalio.

China's goals to maintain growth and cut leverage levels may not necessarily lead to economic difficulties, Dalio was quoted as saying.

"Naturally, slowing or stopping bad lending slows economic growth over the short term and helps it over the long term," Dalio said.

As long as China continues making rapid reforms and broadening the expansion to less-developed parts of the economy while maintaining stability, the long-term prospects are very bright because that rapid productivity growth will continue, he said.

China's central government has been keeping up efforts to curb excess lending to state-owned enterprises, especially those in heavy industry suffering from overcapacity, while striving to maintain credit supply to more productive borrowers.

Deleveraging is one of the important tasks in China's supply-side structural reform.

China's economy expanded 6.7 percent in the first three quarters of the year, above the government's annual growth target of around 6.5 percent set for 2018.


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