China's corporate debt levels are excessively high, the head of the central bank said on Friday.
Banks cannot support firms with high leverage, People's Bank of China Governor Zhou Xiaochuan told reporters at a news conference on the sidelines of the annual parliament session in Beijing.
Zhou added that China's efforts to cut debt levels will be a medium-term process.
China needs to stabilise its overall debt levels and slow down the pace at which debt is rising, deputy central bank governor Yi Gang said at the same session.
China's credit growth has been "very fast" by global standards, and without a comprehensive strategy to tackle the debt overhang there is a growing risk it will have a banking crisis or sharply slower growth or both, the International Monetary Fund warned late last year.
Corporate debt has soared to 169 percent of gross domestic product (GDP).
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