According to the "China's Leverage Ratio Report 2022" released recently by the National Finance and Development Laboratory, China's macro leverage ratio increased by 10.4 percentage points in 2022, from 262.8% at the end of 2021 to 273.2%. The macro leverage ratio is the ratio of the debt scale of a country's non-financial entity sector to its gross domestic product, which can reflect the social financing situation and the total asset-liability scale of a country over a period of time, thus providing a reference for effective analysis of economic development trends and robustness. According to the analysis, there are many reasons for the rise of the macro leverage ratio last year: the economic growth rate has decreased, which has raised the level of the macro leverage ratio. At the same time, government departments should strengthen the overall planning of financial resources, maintain the necessary expenditure intensity, and provide necessary financial support for the overall planning of epidemic prevention and control and economic and social development. Keeping the macro leverage ratio basically stable and handling the relationship between economic development and risk prevention is of great significance for maintaining the overall stability of the financial market and maintaining the safety bottom line. Since last year, in response to the downward pressure of the economy, China has deployed a package of policies and measures to stabilize the economy. The impact of these counter-cyclical control policies on debt growth will be reflected in the current period, but the impact on output is relatively lagging. Therefore, the periodic rise of the macro leverage ratio is not only an objective reflection of the external impact, but also a timely response to the counter-cyclical control policy to help stabilize the macroeconomic market. In fact, since the fourth quarter of 2020, China has achieved remarkable results in stabilizing leverage and promoting growth, and the macro leverage ratio has declined for five consecutive quarters, creating valuable policy space for the follow-up response to various complex situations. From the perspective of international comparison, since the epidemic, China's macro leverage rate has increased significantly lower than that of other major economies, and the relatively small amount of new debt has supported the rapid economic recovery. At the same time, China's economic performance continues to remain ahead and inflation is generally controllable. The moderate increase in the macro leverage rate supports the realization of an optimized combination of fast growth and stable prices, which is just a sign that China's macro policy is strong, moderate and effective. Levers have the function of allocating capital resources in time and space. There is no difference between good and bad. Normal and reasonable application is conducive to promoting economic development, while beyond the normal and reasonable range is not conducive to promoting economic development. In other words, proper use of leverage can play its role in promoting economic growth, while one-sided pursuit of leverage will increase development risks. Keeping the macro leverage ratio basically stable is based on the overall and long-term stability. As the "warning line" of economic cycle changes, the macro leverage ratio is currently basically stable, which can reflect that China's financial risks are generally controllable and tend to converge, which also creates space for the future financial system to continue to increase support for the real economy. Considering the steady recovery of the financing demand of market entities, the acceleration of investment by government departments and enterprise departments, the steady improvement of consumption capacity and willingness, the introduction of incremental policy instruments and the acceleration of local debt issuance, there is still room and possibility for the macro leverage ratio to rise this year, but the growth rate and slope are expected to slow down. Although there are still many uncertainties in the internal and external environment, China's economy is strong in resilience, potential and vitality, and the fundamentals of long-term improvement will not change. With the economic stabilization package and
Edit：Hou Wenzhe Responsible editor：WeiZe
Source：economic dairy
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