Fitch: China's regulation pledge could signal shift away from high growth targets

The US-based ratings agency, Fitch Ratings, published a latest report on China, stating that China's efforts to contain financial risks could shift the policy focus from achieving high economic growth targets, though policymakers are likely to remain cautious about the looming risks.

Key Points:

"This could signal rising potential for a more decisive shift in policy focus away from hitting high growth targets, but there is still uncertainty over whether the drive to address risks will continue to take priority if the economy slows."

Tightening is likely to become more targeted as authorities try to limit the impact on economic growth.

China will be wary of triggering a liquidity crunch through regulatory tightening, making an abrupt clampdown on shadow banking activities unlikely.