China Will Tame Its Growing Debt Load in 3 Years, Top Xi Adviser Says


Mr. Liu is one of the most enigmatic figures in Mr. Xi’s kitchen cabinet. He has met frequently over the years with Treasury secretaries from the United States and with other foreign officials, always privately and often away from government buildings to make clear that his role was unofficial.

In October, Mr. Liu was named to the Communist Party’s powerful Politburo. He is also widely expected to take charge of a financial stability commission created last summer that is to have broad powers to oversee domestic economic policy, including fiscal issues and financial regulation. His speech at the World Economic Forum was a rare appearance on the global stage for the Harvard-educated official.

On Wednesday, Mr. Liu also repeated pledges made by other Chinese officials about the country’s opening its markets to foreign competition in everything from financial services to cars.

There are already signs that China’s efforts to slow the rate of debt growth are working. Statistics from the Bank of International Settlements, a Swiss group owned by the world’s largest central banks, shows that corporate debt as a share of national economic output began to dip slightly early last year.

Still, economists are watching China’s debt levels closely, especially the sums accumulated by the country’s big state-run companies. Many state-run banks have accepted equity in exchange for bad debt rather than being repaid. As a result, the plan that Mr. Liu outlined on Wednesday might not fully reflect actual debt exposure in China.

Mr. Liu alluded to other financial concerns, although he provided few details. “Shadow banking and hidden debt for local governments are serious problems we have to deal with,” he said.

Mr. Liu also said that China planned to gradually reduce its tariffs on imported cars. The country has built the world’s largest auto industry behind prohibitive 25 percent tariffs on imported cars.

Beijing is reconsidering that policy as Chinese automakers gear up to become big exporters to the United States and other foreign markets that currently have low tariffs but might revisit those policies as car shipments from China rise.

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