China's campaign to cut debt enters new stage: stock exchange official

Shanghai

CHINA is in a new phase of its campaign to cut debt, focusing on rules to shrink a bloated financial sector that has grown rapidly as product innovation outpaced regulatory oversight, a senior researcher at the Shanghai Stock Exchange said.

The financial sector has threatened growth by crowding out resources in the real economy, while the ballooning shadow banking business has boosted money supply and created expectations of asset price inflation, said Shi Donghui, director of the Shanghai exchange's Capital Market Institute.