Colin

On the other hand, policies to stabilize growth also contr

tribute to deleveraging, Hu said.

“The large-scale reduction of taxes and fees could efficiently reduce burdens on enterpris

es and strengthen their ability to repay debts and absorb equity financing,” she said.

Zhu Min, chair of the National Institute of Financial Research at Tsinghua University, sai

d it is clear that China will “move more on fiscal policy than monetary policy” to offset short-term economic challenges.

This year’s tax and fee cut on enterprises-worth nearly 2 trillion yuan ($297.8 billion)-is “really encouraging”, which will

improve their productivity and efficiency, said Zhu, a former deputy managing director of the International Monetary Fund.

The debt level, especially for State-owned enterprises, is still high, Zhu said, making i

t necessary to continue deleveraging to contain risks and achieve sustainable growth.

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