China must curb credit growth: IMF official

Updated: 2014-04-12 05:40

By MICHAEL BARRIS in New York (China Daily USA)

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China must move to rein in a record expansion of lending that endangers the financial system, even if growth slows, an International Monetary Fund official said.

“China’s growth rate may go slightly lower than the 7.5 percent we are forecasting, but that is a desirable adjustment to a more sustainable growth path,” IMF Asia-Pacific director Chang Yong Rhee told reporters Friday.

“I think the government understands this problem very well," Rhee said at a media briefing that was broadcast live over the Internet. "Premier Li Keqiang also mentioned today that they’ll need a strong stimulus plan to cope with short term volatility. I think that’s the right stance.”

“Maybe they will sacrifice the growth rate a little bit but on the other hand (figuring out) how to rein in the expansion of the credit growth, especially outside the banking sector, seems to be a very important task to secure their long-term stability.”

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