China's corporate debt levels are too high but it will take time to bring them down to more manageable levels, the head of the central bank says, underlining an uphill battle to put the world's second-largest economy on a more sustainable footing.
Chinese leaders have pledged to contain debt and housing risks in 2017 after years of credit-fuelled expansion, which has been propelled by the need to meet official economic growth targets.
But many analysts remain doubtful over the government's commitment to follow through on potentially painful reforms, especially if growth falters.
"Non-financial corporate leverage is too high," People's Bank of China Governor Zhou Xiaochuan told reporters at a news conference on the sidelines of the annual parliament session.
Efforts will be made to contain debt levels, including restructuring of firms with heavy debt burdens, alongside a push to reduce excess industrial capacity, he said.
Banks will withdraw support for financially unviable firms, he added, repeating pledges by other officials last year to drive such "zombie" firms out of the market.
