Caixin
Dec 05, 2018 07:14 PM
ECONOMY

China Sets Deadline to Deal With ‘Zombie’ Companies

A strip steel production line in Linfen, Shanxi province, on Nov. 14 2017. Photo: VCG
A strip steel production line in Linfen, Shanxi province, on Nov. 14 2017. Photo: VCG

China wants to kill off — or possibly revive — its lurching horde of “zombie” companies by 2020.

The central government has given local governments and state-owned asset management departments three months to submit a list of money-losing companies and has required that they be restructured or disposed of by the deadline.

The deadline shows that the issue of China’s immense corporate debt, especially at state-owned enterprises (SOEs), remains on the government’s agenda. According to the latest Ministry of Finance data, China’s SOEs had 113.9 trillion yuan ($16.5 trillion) in total debt as of the end of October, up 7.7% for the year.

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