China's "real economy" needs a major boost to drive healthy overall economic growth, a senior official from the Leading Group for Financial and Economic Affairs said on Saturday.
Leading Group deputy director Yang Weimin, told an economics conference that the nation would put improving the real economy, including manufacturing and construction, high on the agenda next year while continuing to implement supply-side reforms.
Yang said much of China's recent economic growth had come from the financial and real estate sectors, which is not "appropriate" amid economic transformation.
Yang's comments came after the central economic conference, that sets the tone for next year's economic development, closed on Friday.
Yang expected economic growth in the fourth quarter would not change much compared to the first three quarters, during which the nation recorded 6.7 percent growth rate. That falls within the annual target range of 6.5 to 7 percent.
Yang also said China would put more emphasis on resolving key challenges that may threaten economic recovery next year.
In order to boost the real economy, Yang said the government needed to introduce more market incentives that reward productivity and efficiency and encourage innovation.
In the meantime, more efforts are needed to lower corporate debt ratios, with a large proportion of bad loans coming from sectors that are running over capacity.
"If not addressed properly, piling up debt would hollow out the real economy," Yang said.
Corporate debt is estimated to reach about 169 percent of China's gross domestic product, compared with 71.7 percent in the United States and 100.5 percent in Japan, according to the Bank of International Settlements.
