Authors: Ruan Jianhong, Director-General, Statistics and Analysis Department of the People’s Bank of China
Liu Xi, Statistics and Analysis Department of the People’s Bank of China
Abstract: China’s effort to steadily deleverage has delivered positive results in recent years, with the leverage ratio rising at a much lower rate of 7.3 percentage points in the 2017-2019 period. In 2020, China’s macro leverage ratio rose relatively fast due to the COVID-19 impact. In the face of the severe pandemic, the Communist Party of China (CPC) Central Committee with Comrade Xi Jinping at its core has exercised strong leadership and made decisions resolutely. With coordinated efforts to advance both pandemic control and economic and social development, China has achieved major strategic success in fighting the pandemic as the Chinese economy is picking up stably and life and production are returning to normal, providing fundamental support for the stabilization of the macro leverage ratio. In Q4 2020 and Q1 2021, China’s macro leverage ratio recorded net falls for two consecutive quarters. Meanwhile, financial support for the real economy has become more efficient and the structure of leverage is improving. With the weakening of the COVID-19 impact, the economy will stabilize and total debt will be aligned with economic growth. So China’s macro leverage ratio is projected to remain basically stable this year.
Keywords: macro leverage ratio, economic growth, stabilization of leverage
China Has Made Significant Progress in Stabilizing Leverage and Promoting Growth.pdf
