China’s campaign to lower debt continued to see success in the third quarter but momentum is slowing due to a stalling of economic growth, reports the South China Morning Post. Defusing China’s financial risk is an economic priority for the country’s leadership and the nation’s leverage ratio—which measures the percentage of debt to gross domestic product (GDP)—is closely watched as an indicator of progress. The lower the ratio, the lower the amount of debt per US dollar of national output.
The ratio fell to 264.8% in the three months to end September, from 265.4% in the previous quarter—the fourth straight quarterly decline, the National Institution for Finance and Development (NIFD) said in a report on Tuesday.
But the decrease of 0.6% was slower than the 2.6% fall in the second quarter. That was because GDP output was also falling, which diluted the effects of deleveraging, according to NIFD, a research body under the Chinese Academy of Social Sciences.
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