Capital Link International CEO Brett McGonegal. Photo: CNBC screen grab

China’s drive to suck large amounts of debt out of its economy was a laudable initiative that would boost the nation and global economy, a Hong Kong analyst said on Thursday.

“The transparency that you’re seeing from the [Chinese] government and the pressure that they’re putting on the deleveraging, that I think is a very positive thing,” Brett McGonegal, the CEO of Capital Link International, told CNBC.

“It has a very short-term effect when you deleverage. But I think the credibility that they’re gaining and the actual leverage [debt] that is being sucked out of the system is a long-term positive and people should be looking at that as the real catalyst going forward.

“There’s a lot of excess leverage. [Politburo member and economic czar] Liu He has gone on his campaign and he says it’s gonna take seven years to take it out.”

McGonegal said there was talk that Liu He would take control of the People’s Bank of China – a move he welcomed, saying having the country’s economic mastermind helping to separate the central bank from the government and making it an independent body was also “hugely important”.

Brett McGonegal is a principal investor in Asia Times.

Also see: President Xi turns to old friends to manage economy

China’s drive for deleveraging is a ‘long-term positive’ from CNBC.

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