Local measures needed on debt, president asserts

Local governments and enterprises should take effective measures to deleverage as soon as possible, and a mechanism to coordinate central and local financial regulatory work needs to be established, President Xi Jinping said on Monday.

Forestalling and defusing financial risks, as one of the "three tough battles", is key to ensuring national security, overall development and property safety, and also carries a lot of weight in achieving high-quality growth, said Xi, as he presided over the first meeting of the Central Committee for Financial and Economic Affairs.

Xi, also general secretary of the Communist Party of China Central Committee and chairman of the Central Military Commission, urged local governments and enterprises, especially State-owned ones, to achieve a quick deleveraging process, according to a statement issued after the meeting.

The overall macro debt level, in the meantime, should be stabilized and reduced gradually, the statement said.

Diversified and specific measures can be launched and put into practice, depending on different risk situations in different sectors and markets, and "the top priority is to solve problems that could threaten economic and social stability and may trigger systemic risks", the statement said.

The meeting also stressed the important role of the Cabinet-level financial stability and development committee, which was established in November.

A central and local-level financial regulatory mechanism needs to be established soon, highlighting local governments' responsibility for forestalling and defusing risks, the statement said.

China is able to forestall financial risks, Yi Gang, the central bank governor, said last week. Yi also stressed the importance of maintaining a prudent and neutral monetary policy, as well as stabilizing the whole financial sector, his key tasks for this year.

The first meeting of the Central Committee for Financial and Economic Affairs also studied key measures in targeted poverty alleviation and environmental protection, and reviewed the working rules of the newly established committee.