Official warns of bubble risk in financial sector

Source:Reuters-Global Times Published: 2017/11/16 22:48:39

China's financial sector faces bubble risks, a government official warned on Thursday, and a property tax may be on the cards in the near future as authorities extend their efforts to reduce a worrisome build-up of debt in the economy.

The ratio of China's financial sector to the overall economy "is the highest in the world," said Huang Qifan, vice chairman of the National People's Congress Financial and Economic Affairs Committee.

The excessive level of M2, a measure of money supply, brings risks of "inflation, primarily reflected in housing prices, which have risen about eight-fold in the past 10 years," Huang said.

He also noted that a property tax could be implemented in the next few years, as it might help temper speculation.

Huang also said China's forex reserves can currently only be invested in liquid foreign debt.

Posted in: ECONOMY

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