China Private Firms Show Way Out of Debt Trap for State Giants
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Leverage ratios improve at private companies, worsen at SOEs
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Nation’s annual legislative meetings to be held early March
China’s private companies are doing a better job than state-owned peers cutting debt, new research shows, adding to calls for President Xi Jinping to overhaul the country’s industrial sector ahead of annual legislative meetings in Beijing.
Private companies have cut debt to 53 percent of assets from 58 percent in 2007, while SOEs have seen those figures jump to 62 percent from 55 percent, according to estimates from Shi Kang, an associate economics professor at the Chinese University of Hong Kong who has served as a visiting scholar at the People’s Bank of China. About 40 percent of bank loans to companies go to SOEs, which only contribute to around 10 percent of the nation’s economic output, according to Nomura Holdings Inc…
China Private Firms Show Way Out of Debt Trap for State Giants
