The Chinese Finance Minister, Xiao Jie, on the sidelines of the National People's Congress during the annual parliamentary session declared that China is "fully confident" of its ability to prevent systemic debt risks, stressing that the debt / GDP ratio of the China fell to 36,2 percent at the end of 2017 from 36,7 percent in 2016, explaining that the public debt / GDP ratio is likely to remain at the same level over the next few years.
While China's public debt is not as high compared to other countries, international financial organizations have raised the alarm about the country's corporate debt levels. The International Monetary Fund said in December that China's corporate debt amounted to 165% of GDP in 2015, and has grown rapidly since then. The debt poses "financial stability risks," the IMF said.
Preventing financial risks is one of the "three critical battles" of the country, together with the fight against poverty and pollution, as announced last Monday by Chinese Prime Minister Li Keqiang, opening the parliamentary session.
The fundamentals of the Chinese economy remain solid and we have many policy tools at our disposal, ”Li said. “We are fully capable of preventing systemic risks”.