China’s government and companies are “rationalizing” their use of debt amid concerns over growing leverage on the mainland, Eugene Qian, chairman of UBS’ China strategy board, told CNBC’s “Street Signs” on Tuesday.

“Over the period of high growth, the Chinese economy and in particular the corporate sector has accumulated a large amount of debt,” Qian told CNBC on the sidelines of the World Economic Forum’s “Summer Davos” event in Dalian, China.

“However, I think the way the Chinese are tackling this, both the government and I think the corporate sector, is ‘let’s look at the ways to rationalize,'” he said. “Everyone seems to realize that you cannot grow purely on the back of the debt or debt burden increase.”

Qian also noted that it was “good news” that the Chinese don’t rely on external debt much, using domestic funding supported by the country’s massive savings instead.

Concerns over China’s debt load have been growing.

In a note on Monday, Nomura estimated that China’s outstanding non-financial sector debt hit 191.3 trillion yuan ($27.96 trillion), or 251 percent of gross domestic product (GDP) in the first quarter, up from 158.3 trillion yuan, or 231 percent of GDP, at the end of 2015.

Last month, Moody’s Investors Service expressed concern that China’s effort to support economic growth would spur higher debt levels, and the ratings service downgraded the mainland’s sovereign credit rating to A1 from Aa3, changing its outlook to stable from negative.

Moody’s estimated that while the government budget deficit in 2016 was “moderate” at around 3 percent of gross domestic product (GDP), it expected the government’s debt burden would rise toward 40 percent of GDP by 2018 and 45 percent by the end of the decade.

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