The investment activities supported by high leverage are inefficient, which is the core problem to be solved by deleveraging. Similar things have happened in China's 40-year reform and opening-up. For example, in the late 1980s and early 1990s, there was a climax of township enterprises' investment. However, with the economic development, it gradually became invalid investment. Today's high leverage is just another form of historical repetition. Similar to the history, the current "deleveraging" should deal with the remaining problems such as invalid investment, and more importantly, we should gradually hold the "throat" of invalid investment systematically.The specific measures are as follows. Firstly, we should speed up the reform of state-owned enterprises and break implicit guarantees and soft budgetary constraints. Secondly, we should optimize the budget management system and constrain the investment activities of local governments transparently. Thirdly, we should continue to accelerate the reform in financial regulation and other areas, so as to improve the capacity of financial system supporting the efficient development of the real economy.
