Li Yang, director of China’s National Finance and Development Laboratory and a member of the Chinese Academy of Social Sciences, said today that the leverage ratio of China’s residents has surpassed that of Germany and Japan in 2020, which is a more dangerous signal; and the rising trend of China’s resident debt since 2010, which is similar to the trend before the outbreak of the U.S. subprime mortgage crisis, is particularly alarming.
Chinese experts warned that the rising trend of China’s resident debt, similar to that before the outbreak of the U.S. subprime mortgage crisis, is particularly alarming. Li Yang, director of China’s National Finance and Development Laboratory and a member of the Chinese Academy of Social Sciences, said on Wednesday that China’s residential sector leverage ratio had been relatively stable from 2004-2009 and has risen sharply since then, Reuters reported today.
Speaking at the Shanghai Derivatives Market Forum, Li Yang said, “Most of the resident debt is related to the real estate market, which reinforces the risk spillover between the resident debt risk and the real estate market.” He also noted that most of China’s government bonds, especially local government debt, are held by commercial banks, leading to the financialization of fiscal policy and increasing the spillover of fiscal and financial risks.
As for the impact of rising commodities on China’s policy, Li Yang expects that price changes will not be the main factor leading to changes in macroeconomic policies this year.
According to the report, concerns about the rapid rise in commodity prices have been a key concern for China’s top officials recently. The National Development and Reform Commission, the Ministry of Industry and Information Technology and other five departments held a meeting on Sunday, proposing to attach great importance to the adverse impact of rising commodity prices, and to take comprehensive measures to protect supply, curb unreasonable price increases, and try to prevent the transmission to consumer prices; the previous week, the State Council proposed to effectively respond to the rapid rise in commodity prices and its collateral effects, and strengthen monetary policy and other policies to maintain economic The previous week, the State Council proposed to effectively respond to the rapid rise in commodity prices and their associated effects, strengthen monetary policy and other policies to maintain a stable economy.
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