DEBT growth for Chinese companies has slowed to the lowest rate in more than a decade, according to latest analysis, which would provide relief for policymakers worried about the fallout from years of loose lending practices.

The overall debt levels of Chinese companies grew 3 percent in the first quarter of this year, according to analysis of 1,843 firms listed in Shanghai and Shenzhen, the slowest pace in at least 13 years.

Combined total debts — including borrowing via loans and bond issuances — amounted to 13.2 trillion yuan (US$2.1 trillion) at the end of March, the slowest pace of growth year on year since at least 2005, the analysis showed.

That amount was down 6.2 percent from the fourth quarter of the year, a steep drop after companies ramped up leverage during 2017.

Revenue growth, meanwhile, more than halved to 12.3 percent in the first three months of 2018 from 26.7 percent a year ago. Net profit margins were also squeezed to their lowest level in two years, with sectors like information technology particularly hard hit.

The government is in the third year of a regulatory crackdown on riskier lending practices, which has slowly pushed up borrowing costs while reducing these alternative and murkier funding sources for companies such as shadow banking.

China’s overall debt level rose 2.7 percentage points in 2017 to 250.3 percent of gross domestic product due to the impact from China’s supply-side reforms, improving economy and corporate profits, the central bank has said.(SD-Agencies)