Lowering government and corporate leverage ratios could take a toll on an already slowing Chinese economy, Reuters reported, citing remarks made by a senior central bank official state-run China Securities Journal. He said the slowdown could expose, in particular, the property sector and local government financing vehicles to high risks. Sky-rocketing credit in recent years has driven concerns that falling growth rates would sink these debt-swollen entities into the red. The central bank’s governor Zhou Xiaochuan made similar remarks, saying earlier this month that the government must be wary of the dangers of high leverage in the corporate sector.
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