(Reuters) – China’s economy is now more sustainable and domestic consumption is steadily rising, Chinese Central Bank Vice Governor Yi Gang told a G20 meeting of finance officials earlier this week.
Yi’s remarks came after China posted its slowest economic growth in 24 years in 2014, with a cooling housing market, slowing investment and recent underwhelming exports expected to weigh further on domestic demand this year.
To stoke growth and bank lending, China’s central bank last week reduced the amount of cash that banks have to hold as reserves for the first time in over two years. That was after it had unexpected cut interest rates in November.
Finance officials from the Group of 20 leading economies sketched an uncertain outlook for global growth on Tuesday and vowed to use monetary and fiscal policy if needed to stem any risk of stagnation.
Yi also was quoted on the central bank’s website on Wednesday as saying that the central bank was closely monitoring China’s property market and shadow banking sector, and increasing the transparency of the nation’s local government debt.
China’s shadow banking business, which includes investment trusts and bill acceptances, ballooned to 45 trillion yuan ($7.21 trillion) at the end of 2014, according to estimates by ratings agency Moody’s Investors Service.
That amounted to 71 percent of China’s economy, compared to 66 percent at the end of 2013, Moody’s said.