http://www.rba.gov.au/speeches/2018/sp-gov-2018-05-23.html  16/20  5/25/2018  Australia's Deepening Economic Relationship with China: Opportunities and Risks | Speeches | RBA  The Policy Response Dealing with this risk has become a key priority for the Chinese authorities. Reflecting this, at a recent policy meeting convened by President Xi Jinping, the leadership called for a gradual reduction in the debt-to-GDP ratio.
This marked a significant change from earlier statements from officials suggesting the target was only to slow the growth in leverage. The authorities are clearly taking the issue seriously and they are making progress. The policy response, to date, has had a number of related elements. One is to subject shadow banking, including asset management activities, to more stringent oversight.