People's Bank of China Governor Zhou Xiaochuan said Oct. 15 that China's companies have high levels of debt as he called for fiscal reforms and less financial leverage, Bloomberg News reported.

"We need to pay further effort to deleveraging and strengthen policy for financial stability," Zhou said during a panel discussion at a Group of 30 seminar in Washington, D.C.

He said some of China's corporate debt includes borrowing from local government-owned financing vehicles. When that debt is redefined, corporate borrowing is estimated at 120% to 130% of gross domestic product, instead of the official figure of 160% of GDP. This raises government debt to about 70% instead of 36%, he said.

Zhou said complicated relationships among provincial, municipal and more than 3,000 county governments aggravate price distortions for loans and debt borrowed by local governments.

"There's no very clear fiscal discipline to constrain those local governments," he said.

Global policymakers and investors have raised concerns about China's high corporate debt. While the International Monetary Fund raised its outlook for China's growth, it warned that the economic expansion comes at the cost of higher debt, which could mask risks, Bloomberg reported, citing the fund's world economic outlook report released Oct. 10.