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Report: China to 'actively and steadily' unwind leverage under 5-year plan

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Report: China to 'actively and steadily' unwind leverage under 5-year plan

China will "actively and steadily" unwind leverage and reduce risks to the financial sector, Reuters reported May 21, citing two sources and the country's five-year plan for the sector.

The 2016-2020 plan includes enhancing the role of price-based monetary policy targets with interest rates as core, according to the sources and a document seen by the news outlet. The plan also includes increasing the share of direct financing, especially equity financing, in the country's financial system, as well as encouraging more cross-border yuan payments, with an aim of exceeding a third of all cross-border payments by 2020, the sources added.

China's 13th five-year plan outlines the blueprint of its economic development from 2016 and 2020. New items have been added to the original plan, which was adopted in March 2016 by the People's National Assembly of China. It is not known when the latest update reported by Reuters, to be jointly issued by the People's Bank of China, financial regulators and other government agencies, will be released to the public.

China's new central bank governor, Yi Gang, said in late March that it will maintain a "moderate" monetary policy with a focus on financial and market-access reforms while keeping an eye on financial stability.