Chinas central bank warned on Thursday of financial risks in the country that have accumulated over the years, as well as shocks from overseas uncertainties. These risks include oscillation in the stock and fixed income markets and potential bond defaults in real estate companies, said Zou Lan, director of the Peoples Bank of Chinas financial markets department.

The detailed comments mark the latest warning from highlevel officials in China in recent weeks about domestic market risks. The Shanghai composite is little changed for the year, while the SP 500 has climbed more than 5. The coronavirus pandemic and high volatility in international capital flows have also shocked the domestic financial market, Zou told reporters.

Zou added that pressure from rising house prices in some hot cities is relatively large, and the potential of debt default and other risks among highly leveraged mediumsized and small real estate businesses is worth watching. The Chinese government announced last month it will target GDP growth of over 6 this year. Many economists said the conservative target gives policymakers the ability to address longterm problems such as a buildup of debt.

Chinas debttoGDP ratio rose to 285 as of the end of the third quarter of 2020, up from an average of 251 between 2016 to 2019, according to a report from Allianz, citing analysis from its subsidiary Euler Hermes. Among signs that authorities have started to get serious about domestic risks, some stateowned…