China’s currency is largely fairly valued but Beijing needs to speed up financial reform to head off the risk of systemic shock, a senior International Monetary Fund official warned, according to The Wall Street Journal. David Lipton, the IMF’s first deputy managing director, said China’s corporate debt is high and rising fast, and that tackling this and other problems without delay is essential given uneven progress in restructuring and weaker bank balance sheets that make it more difficult to absorb financial shocks. The IMF estimates that China’s corporate debt is equivalent to 145% of gross domestic product, which it describes as “high by any measure.”
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