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By Yin Lei

The overall leverage ratio in China rose slightly in the real economy domains and kept declining in the financial sectors for the second quarter of 2018, a report showed on Tuesday.

This China Deleveraging Report (Quarter two), a probe into China’s deleveraging progress, was issued by the National Institution for Finance & Development (NIFD) and its affiliated Center for National Balance Sheet (CNBC).

During the second quarter, the overall leverage ratio in China’s real economy, which encompasses consumers, non-financial companies and governments at different levels, increased by 0.6 percentage point to 242.7 percent, up from 242.1 percent at the end of 2017.

This slight increase stemmed from the rise in the consumer leverage ratio, which went up by 2 percentage points to 51 percent for the six months ending June.

Still, thanks to the slowdown in the housing loan expansion, this 2 percentage points change was smaller than the 2.8 percentage points growth as seen in the first half of 2017.

The non-financial enterprises and governments at different levels all experienced a decrease in their debt burdens, collectively seeing a 1.4 percentage points decline in their leverage ratio since the end of 2017.

For non-financial enterprises, their overall leverage ratio has been on the decline for five quarters from the peak of 160.9 percent, which was registered in early 2017.

Governments at different levels saw this ratio fall by 0.8 percentage point to 35.3 percent. As they issue more bonds and replace old debts with new ones, their leverage ratio may rise by a small margin in the second half of this year, predicted Zhang Xiaojing, deputy director of NIFD.

In the financial sectors, the overall leverage ratio has slid to the level back in 2014. On the assets side, this indictor shrank from 69.7 percent to 64.3 percent for the six-month period to the end of June, while on the liabilities side it was down from 62.9 percent to 61.6 percent for the same time span.