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Pimco Says China Deleveraging May Soften in 2018

  • Pimco says deleveraging to be less intense due to slowdown
  • Mieth says bond defaults will primarily be in private sector
The Opening of the First Session of the 13th National People's Congress
Photographer: Qilai Shen/Bloomberg
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China’s campaign to curb financial leverage, which pushed bond yields to three-year highs in 2017, may become less intense this year as growth in the economy decelerates, according to Pacific Investment Management Co.

Roland Mieth, emerging market portfolio manager at Pimco, said China achieved good progress in deleveraging last year. A Bloomberg survey of economists last month showed expectations for more stabilization, with total debt likely to be 260 percent of gross domestic product at the end of 2018, the same as a year earlier.