- China's leaders have pledged to curb ballooning domestic debt, particularly that of local governments, and cut industrial overcapacity, although whether they'll be able to follow through is another matter.
- "They may be talking the talk" on debt, says UBS economist Tao Wang. "But it's hard to tell if they can walk the walk because of the rapid development of shadow lending."
- China's leaders have expressed a desire to cut capacity before but without success, as they fear that any resulting layoffs could cause unrest.
- The pledges, which include ensuring "reasonable" growth as well, came at the end of the Central Economic Work Conference, a meeting of China's leadership.
- China also plans to extend and liberalize access to its over-the-counter (OTC) market for small and medium-sized companies. The move will provide such firms with another source of funding and comes as China aims to shift its reliance away from large state-owned enterprises.
China pledges to reduce debt, overcapacity
Dec 15 2013, 03:03 ET