China Intensifies Push to Cut Debt With Multi-Agency Blitz
- State Council issues guidelines on swapping bad debt to equity
- IMF has flagged the potential threat from growing debt pile
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China released guidelines for reducing corporate debt while also saying that the government won’t bear the final responsibility for borrowing by companies, the latest sign that policy makers are stepping up their fight against excessive leverage.
The State Council, China’s cabinet, issued guidelines for reducing corporate debt and for how banks may swap bad debt to equity. At the same time, officials from the central bank and other government regulators held a briefing at which they described corporate leverage as high among major global economies.