Tighter Money to Follow? Zhou Warns on Debt

Taipei Times: China’s central bank governor warns over debt
People’s Bank of China Governor Zhou Xiaochuan (周小川) sounded a warning over rising debt levels, saying lending as a ratio to GDP — and especially corporate debt — had become too high.

China still has a problem with illegal fundraising and financial services are insufficient, Zhou said in a speech at the China Development Forum in Beijing yesterday.

“Lending as a share of GDP, especially corporate lending as a share of GDP, is too high,” Zhou said. He said a high leverage ratio is more prone to macroeconomic risk.
Zhou apparently wants to revive the equity markets instead:
China should also channel more savings into the corporate sector, he said.
Rising equity amounts to a transfer of assets from the state to the private economy. Unless he's talking about raiding the bank accounts of the public, via the impairment of banks following a forced debt-to-equity swap...

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