China’s economy has once again posted steady growth, expanding 6.8 percent in the third quarter.
The latest GDP figures were above Beijing’s target of 6.5 percent. Despite that the world’s second-biggest economy is trying rein in debt.
Speaking on the sidelines of the Communist Party Congress, the governor of China’s central bank issued a stark warning about a potential crash in asset prices.
Zhou Xiaochuan, Chinese Central Bank Governor said: “Overall, we first need to prevent the risk caused by virulent inflation. The other (risk), of which everyone is aware of, is to prevent the acute correction caused by asset bubbles. This bubble might be in the stock market, might be in the real estate market, or could be in shadow banking, and financial derivatives.”
Analysts and global economic bodies such as the International Monetary Fund have also warned Beijing that it is still too reliant on debt-fuelled stimulus to meet fixed growth targets.
Rating agencies estimate the overall debt burden at almost three times economic output.
China is attempting to drive domestic consumption and move away from export-led growth.