China will tame its growing debt load, key adviser says

Liu He﻿, senior adviser to President Xi Jinping of China, tells a special session Wednesday at the World Economic Forum that China has "a clear plan" to reduce its debt.﻿ Liu He﻿, senior adviser to President Xi Jinping of China, tells a special session Wednesday at the World Economic Forum that China has "a clear plan" to reduce its debt.﻿ Photo: Jason Alden Photo: Jason Alden Image 1 of / 1 Caption Close China will tame its growing debt load, key adviser says 1 / 1 Back to Gallery

DAVOS, Switzerland - A reclusive and influential senior adviser to President Xi Jinping of China emerged here on Wednesday with a public message that many in the financial world have been eager to hear: The country has a timetable for curbing its vast appetite for debt.

Speaking to attendees at the World Economic Forum, the adviser, Liu He, said that the Chinese government planned to bring its debt under control within three years. Liu said Beijing intended to focus on reining in the growth of debt among local governments and companies.

"We have full confidence and a clear plan to get the job done," he said.

Liu did not offer details of the government's plans, or a specific standard by which China could be judged on whether it had achieved its goal. But his speech was the latest sign that the Chinese government would de-emphasize debt-fueled growth in the coming years and would instead sharpen its focus on solving thorny economic and social problems, including a surge in borrowing.

Over the course of about a decade, China has accumulated levels of debt that match those in the United States when compared with the overall economy. That has led to worries that the country with the world's second-largest economy would struggle under an immense financial burden.

Other Chinese officials have made vague pledges about tackling debt before. A firm timetable from such a prominent figure, however, was likely to grab attention.

The Harvard-educated Liu is one of the most enigmatic figures in Xi's kitchen Cabinet. He has met frequently over the years with Treasury secretaries from the United States and with other foreign officials, always privately and often away from government buildings to make clear that his role was unofficial.