China’s state or­gans pledge sup­port for ca­pac­ity cuts

The Pak Banker - - BUSINESS -

BEI­JING: China's main govern­ment or­gans have pledged to tackle over­ca­pac­ity and re­duce fi­nanc­ing costs and the debt bur­den of com­pa­nies as of­fi­cials seek to un­der­pin growth in the world's se­cond-largest econ­omy. Au­thor­i­ties will use mul­ti­ple liq­uid­ity man­age­ment tools, im­prove macro-pru­den­tial man­age­ment and keep ap­pro­pri­ate liq­uid­ity lev­els and sta­ble money mar­ket op­er­a­tions, ac­cord­ing to a joint state­ment is­sued Tues­day by agen­cies in­clud­ing the Peo­ple's Bank of China, Na­tional De­vel­op­ment and Re­form Com­mis­sion and the Min­istry of Fi­nance. The na­tion's com­mu­nist lead­ers are seek­ing to main­tain eco­nomic growth of at least 6.5 per­cent a year through 2020 to meet their pledge of cre­at­ing a "mod­er­ately pros­per­ous so­ci­ety." The state­ment comes af­ter Premier Li Ke­qiang took the na­tion's pol­icy mak­ers to task for the way they han­dled a rout in stocks and the yuan, mak­ing him the most se­nior of­fi­cial to date to fault the re­sponse to the tur­moil. Reg­u­la­tors didn't re­spond ac­tively to de­clines and some even have man­age­ment prob­lems, Li said in a State Coun­cil meet­ing on Mon­day, ac­cord­ing to a Bei­jing News re­port car­ried on the govern­ment's web­site. Li didn't spec­ify the reg­u­la­tors at fault and de­fended the de­ci­sion to in­ter­vene in equity and for­eignex­change mar­kets as nec­es­sary to head off sys­temic risks and "defuse some bombs."

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