THE country’s new central bank governor outlined sweeping plans Sunday to rein in rising debt and financial risks, but expressed confidence that the government can prevent potential dangers.

High debt levels for Chinese State-owned companies, local governments and households are “still a challenge,” Yi Gang said at an economic conference. The appearance marked his first extended public appearance following brief remarks to reporters after his appointment last week.

The government has declared controlling financial risks a priority following a run-up in debt that prompted global rating agencies last year to cut the country’s credit rating.

Regulators will “deepen regulatory system reform and enhance its resilience against systemic risk,” Yi said. He said that will include steps to “impose more financial discipline” on State-owned companies, develop a better financing system for local governments and “create a system to prevent risk in the real estate sector.”

“We need to lose no time in adopting guidelines on financial regulation” for specialized entities such as asset management and holding companies that have evolved rapidly, said Yi.

Still, he said, with the government’s experience and resources, “China is in a good position to mitigate and prevent risks.”

Yi, who earned a Ph.D. in economics from the University of Illinois, succeeded Zhou Xiaochuan, who became China’s most prominent figure in global finance during a record 15-year term as central bank governor. Yi is a two-decade veteran of the bank and was well known as director of China’s foreign exchange regulator.

Zhou warned in October that rising debt could have a “severe impact” on the world’s second-largest economy, but told reporters this month that regulators believed they had debt under control.

Total debt in China swelled to above the equivalent of 270 percent of annual economic output, nearly the level of developed countries.

“Potential risks in China are still reflected in a number of sectors,” said Yi. He cited “persistently high” debt at State companies and said the “surging leverage ratio” among households is a “cause for concern.”

Last year, China said it will lift the ceiling on foreign equity ownership in joint venture firms involved in the futures, securities and funds markets to 51 percent from 49 percent, though no timetable was set.

But raising ownership limits does not mean that there will be no supervision, Yi said.

He added that domestic and foreign firms will be treated equally.

The sector’s opening-up will proceed in coordination with reforms in China’s foreign exchange rate mechanism and capital account convertibility, he said.

Yi said China will open its bond market further, and that the second phase of the China International Payments System (CIPS) — a cross-border yuan settlement system — will be rolled out soon.

The system is expected to allow global firms to settle payments with Chinese businesses more efficiently.

“We have three major tasks for the financial system. First, implement prudent monetary policy. Second, push forward financial reforms and opening-up. Third, win the battle against financial risks,” Yi said.(SD-Agencies)