Debt-to-eq­uity plan ex­pected soon

China Daily (USA) - - BUSINESS -

China could al­low in­dus­trial firms to con­vert their debt into eq­uity stakes as early as next month, with the gov­ern­ment now putting the fin­ish­ing touches to a new plan, the of­fi­cial China Se­cu­ri­ties Jour­nal re­ported onMon­day. The news­pa­per said China’s cabi­net, the State Coun­cil, was cur- rently fi­nal­iz­ing plans to al­low “firms in the real econ­omy with de­vel­op­ment po­ten­tial” to con­vert their debt into eq­uity. Debt has emerged as one of China’s big­gest chal­lenges, with the to­tal load ris­ing to 250 per­cent of gross do­mes­tic prod­uct last year. The In­ter­na­tion­alMone­tary Fund warned in June that China’s high cor­po­rate debt ra­tio of 145 per­cent of GDP could erode eco­nomic growth if not ad­dressed. rose to 1.1 bil­lion yuan ($165 mil­lion) for the six months through June, from 965.3 mil­lion yuan a year ear­lier. That com­pared with the 1.12 bil­lion yuan av­er­age of three an­a­lyst es­ti­mates com­piled by Thom­son Reuters.

Newspapers in English

Newspapers from China

© PressReader. All rights reserved.