China has more room to tackle debt - if it wants to

Hong Kong

RISING corporate profits are providing Chinese policymakers with room to do more to tackle the country's growing debt problems without inflicting major damage on the economy.

Profits are increasing even though financial conditions are tightening in some significant areas of the economy; lending rates have inched higher, regulators have clamped down against risky lending and have moved to take the heat out of the property sector. The economy is also comfortably on course to meet the government's GDP growth target this year of around 6.5 per cent.

Although it is far from certain the government will tighten credit conditions further, some economists exp…