PBOC’s Ma Says Credit Curbs Mean Short-Term Pain, Long-Term Gain

Curbing excesses in corporate credit can harm economic growth for two or three years, according to Ma Jun, chief economist of the People’s Bank of China’s research bureau.

While corporate deleveraging is a long process requiring seven years or longer, it can hurt growth in the early stages of addressing the issues, Ma said in a working paper published Wednesday. He said the economy will see a steady rebound in the longer term after excess capacity has been reduced and company profits start increasing.