Home / Comment

How to best solve SOEs' debt problem

By Yao Yang | China Daily | Updated: 2016-10-13 08:07

China's economic slowdown has been the subject of countless debates, discussions, articles and analyses. While the proposed remedies vary considerably, there seems to be a broad consensus that the illness is structural. But another factor has gone largely unnoticed: the business cycle.

For decades, China's economy sustained double-digit GDP growth, but it wasn't immune to the business cycle: in fact, the six-year slowdown China experienced after the 1997 Asian financial crisis was a symptom of precisely such a cycle.

Today, China's business cycle has led to the accumulation of non-performing loans (NPLs) in the corporate sector, just as it did at the turn of the century. While official data show the rate of NPLs is lower than 2 percent, many economists estimate it is more like 3-5 percent. If they are right, NPLs could amount to 6-7 percent of China's GDP.

How to best solve SOEs' debt problem

Today's Top News

Editor's picks

Most Viewed

Copyright 1995 - . All rights reserved. The content (including but not limited to text, photo, multimedia information, etc) published in this site belongs to China Daily Information Co (CDIC). Without written authorization from CDIC, such content shall not be republished or used in any form. Note: Browsers with 1024*768 or higher resolution are suggested for this site.
License for publishing multimedia online 0108263

Registration Number: 130349