Deleveraging battle to intensify

Tighter scrutiny on local government and corporate debt to continue

China's ongoing deleveraging battle will continue to focus on easing corporate debt burden, adding debt-to-asset ratio into their performance assessment, while increasing scrutiny over local government and household leverage, according to a senior economist with an international financial group.

Regulations aimed at further curbing corporate debt are likely to tighten, in line with the restructuring reform process of cutting excessive production capacity and shutting down non-profitable and debt-ridden "zombie firms", said Robin Xing, chief China economist at Morgan Stanley, in an exclusive interview with China Daily.