China Urgently Needs to Contain Financial Risks, IMF Says
- Virus relief measures should be gradually phased out
- IMF sees China’s GDP growing 7.9%, with debt levels climbing
Photographer: Qilai Shen/Bloomberg
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China urgently needs to take steps to contain financial stability risks as the economy’s recovery takes hold, according to the International Monetary Fund.
Virus relief measures that are “potentially distortionary” should be gradually phased out, the Washington-based lender said in its annual Article IV report released Friday. Repayment holidays for borrowers and relaxed rules on how to treat non-performing loans “run the risk of increasing moral hazard and undoing recent progress in strengthening bank transparency and governance.”