IMF: Containing China’s financial risks a priorityBy AP News Jun 05, 2014 7:06PM UTC
BEIJING (AP) — The International Monetary Fund says China should make a priority of containing financial risks that stem from rising debt.
David Lipton, a senior IMF official, said Thursday that Beijing should avoid launching more economic stimulus unless growth drops well below this year’s official target of 7.5 percent.
After meeting with Chinese officials, Lipton said, “We consider that vulnerabilities have risen to the point where containing them should be a priority.”
Large government debt and unregulated informal lending have fueled concern about possible defaults as China’s economic growth slows.
Regulators have begun tightening controls, but Lipton said risks still are rising due to China’s reliance on “credit-fueled growth.”