China has 'confidence to prevent systemic risks': Official

People's Bank of China (PBOC) Governor Zhou Xiaochuan has said that Beijing has the capacity and confidence to control systemic risks while maintaining steady growth.

"The Chinese government has the capacity and confidence to prevent systemic risks and maintain healthy and stable economic operations," Xinhua quoted Zhou as saying on Saturday in a statement sent to the International Monetary and Financial Committee (IMFC) meeting.

According to the official, China has set financial risks control as a top priority and has taken measures to control risks in shadow banking, reduce corporate leverage and prevent property market overheating in some areas.

"In recent years, due to factors such as the economic slowdown, structural adjustment, and high volatility in the international financial markets, the potential risks in China's financial industry have increased, but in general, the risks are manageable," said Zhou.

The official said China will continue to maintain stability and continuity of its macroeconomic policies in order to ensure steady growth while avoid the rise of systemic risks.

The Chinese economy grew at a fast pace of 6.9 per cent in the first half of this year, with consumption and services sector contributing major share of the economic growth.

In view of the better-than-expected growth, the International Monetary Fund (IMF) upgraded its forecasts for Chinese economic growth in this year and next year to 6.8 per cent and 6.5 per cent respectively.

IMF chief Christine Lagarde said at a press conference during the IMF/World Bank annual meetings that the IMF welcomed China's decisions to tame and reduce credit growth.

She suggested that China should continue the policies to rein in credit growth in order to prevent financial risks.

--IANS

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