CHINA’S finance minister Lou Jiwei warned yesterday that the government cannot easily step in to solve debt problems, but that China does not have systemic regional debt risks despite a few corporate defaults.

    Lou was speaking at the conclusion of the G20 meeting of finance ministers and central bankers in the southwestern Chinese city of Chengdu.

    He said the country would take steps to prevent risks involving strategically important financial institutions, and implement both demand-side and supply-side policies — but rely mainly on supply-side reform.

    Also in Chengdu, Bai Chongen, a policy adviser to the central bank and professor at Tsinghua University, told Reuters yesterday that downward pressure on the Chinese economy remains fairly large but it should be able to expand more than 6.5 percent this year.

    “The pressure (on the economy) is still fairly large but there shouldn’t be any problem for us to achieve growth of more than 6.5 percent,” Bai said.

    China’s policymakers have already done a lot on the monetary policy front, Bai said, adding he agreed with the assessment that tax cuts would be more effective at spurring growth than interest rate cuts at this point.

    “We have done a lot on the monetary policy front. Fiscal policy should be more appropriate,” Bai added.

    China has set a target for 6.5 percent to 7 percent GDP growth in 2016, after growth fell to a 25-year low of 6.9 percent in 2015.

    (SD-Agencies)