Rising debt troubles China

People’s Bank of China governor Zhou Xiaochuan sounded a warning over rising debt levels, saying corporate lending as a ratio to gross domestic product had become too high and the country must develop more robust capital markets.

“Lending as a share of GDP, especially corporate lending as a share of GDP, is too high,” Mr Zhou said.

He said a high leverage ratio is more prone to macroeconomic risk. Chinese leaders are struggling to balance between meeting a target of at least 6.5% average annual growth to 2020, while addressing growing debt levels.