Economics
China Gives Relief to Shield Trillions of Yuan in Bad Debt
- Delinquent borrowers get debt reprieve until end of June
- S&P estimated outbreak would boost bad debt by $800 billion
A worker makes insoles at a factory in Wenzhou, China.
Photographer: Noel Celis/AFP via Getty Images
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China’s financial regulators will allow the nation’s lenders to delay recognizing bad loans from smaller businesses reeling from the deadly coronavirus outbreak, giving temporary reprieve to trillions of yuan of debt.
Qualified small- and medium-sized businesses nationwide with principal or interest due between Jan. 25 and June 30 can apply for a delay to the end of the second quarter, the China Banking and Insurance Regulatory said in a joint statement with the central bank on Sunday. In Hubei province, the center of the outbreak, the waiver applies to all companies, including large firms, according to the statement.