Quick Take: China Regulator Vows to Curb SOE Borrowing
(Beijing) — China’s top regulator of state-owned enterprises (SOEs) vowed Thursday to step up oversight over the borrowing of central government-controlled SOEs and “strictly” limit investment by heavily indebted firms.
Authorities will impose curbs on borrowing by any industrial SOE controlled by the central government if the firm’s debt-to-asset ratio goes above 70%, Xiao Yaqing, chairman of the State-Owned Assets Supervision and Administration Commission (SASAC), said at a news conference.
Similar controls will be applied to nonindustrial SOEs overseen by the SASAC if a company’s debt-to-asset ratio exceeds 75%, he said.
Xiao did not specify the curbs.
“For companies whose debt ratio and leverage ratio are high, (we) will enhance our performance assessment and the efforts to hold responsible (officials) accountable,” he told reporters.
The SASAC will also restrict firms’ credit-fueled investment and guide them to focus on their core business, Xiao said.
“(We) will strictly control (investment) by companies whose (debt) exceeds the levels set, particularly if they were pushing their debt ratio higher,” he said.
He added that his regulatory body will crack down on the SOEs’ risky activities, such as investment in financial derivatives and off-balance-sheet business.
The average debt-to-asset ratio of SOEs controlled by the central government was 66.7% at the end of 2016, up 0.4 percentage points from 2012. The figure edged down to 66.5% at the end of last month, Xiao said.
“Currently, central government-controlled SOEs’ debt risk is generally under control,” he said.
In the first eight months of the year, total profits made by the companies rose 17.3% year-on-year, a record high growth rate for the same period, he added.
Contact reporter Fran Wang (firstname.lastname@example.org)
Nov 14 22:18
Nov 14 18:03
Nov 14 18:32
Nov 14 18:57
Nov 14 15:41
Nov 14 13:12
Nov 14 13:27
Nov 14 12:33
Nov 14 12:37
Nov 14 12:53
Nov 14 10:32
Nov 13 23:24
Nov 13 20:13
Nov 13 19:50
Nov 13 18:27
- 1China’s Manufacturing Sector Expands at Fastest Pace in Nearly Three Years, Caixin PMI Shows
- 2China Will Create ‘Space Economic Zone’ by Midcentury: Report
- 3Swiss Telecom CEO Explains Why He’s Sticking With Huawei
- 4China Revamps Undergraduate Studies, Tapping Controversial Talent Program
- 5Alibaba’s Sales Surge 40% and Profit Triples
- 1Power To The People: Pintec Serves A Booming Consumer Class
- 2Largest hotel group in Europe accepts UnionPay
- 3UnionPay mobile QuickPass debuts in Hong Kong
- 4UnionPay International launches premium catering privilege U Dining Collection
- 5UnionPay International’s U Plan has covered over 1600 stores overseas