China Should Commit to Serious Reforms to Address Corporate Debt - IMF

© AP Photo / Mark Schiefelbeinhe moon sets above a Chinese flag flying over Tiananmen Square after a flag raising ceremony on National Day, the 66th anniversary of the founding of the People's Republic of China, in Beijing, Thursday, Oct. 1, 2015
he moon sets above a Chinese flag flying over Tiananmen Square after a flag raising ceremony on National Day, the 66th anniversary of the founding of the People's Republic of China, in Beijing, Thursday, Oct. 1, 2015 - Sputnik International
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The Chinese authorities should promptly address the issue of high corporate debt by carrying out serious reforms, International Monetary Fund First Deputy Managing Director David Lipton said at an economic forum in China.

WASHINGTON (Sputnik) — At present, China’s corporate debt stands at about 145 percent of the country’s GDP, which is "very high by any measure,” he added.

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"Corporate debt [in China] remains a serious—and growing—problem that must be addressed immediately and with a commitment to serious reforms," Lipton stated on Friday at the China Economic Society Conference in Shenzhen.

The IMF manager noted that China faces an "extraordinary" set of challenges as the country’s growth has been slowing. Lipton underscored, however, that the economic difficulties are manageable.

China’s growth, Lipton noted, remains strong by any standard — with the last 25 years being an exception.

"Rebalancing requires a range of actions – not just making way for the new, but also the smooth downsizing of whatever is outmoded or overbuilt."

In January, International Monetary Fund (IMF) Managing Director Christine Lagarde said China had entered the stage of legitimate and crucial transition. Given that, she noted, some market turbulence should be expected ahead.

Lipton argued that the results of China’s rebalancing have been mixed.

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