IDEAS home Printed from https://ideas.repec.org/h/elg/eechap/20587_3.html
   My bibliography  Save this book chapter

Peoples Republic of China: features and recent evolution of corporate debt

In: The Sustainability of Asia’s Debt

Author

Listed:
  • Ninghua Zhong
  • Mi Xie

Abstract

Having analyzed various datasets, including the 4 million observations of industrial firms, we describe the recent evolution of corporate debt in the People's Republic of China (PRC). Unlike in the United States, the rising total debt-to-GDP ratio in the PRC since 2008 has been driven mainly by the nonfinancial corporate sector. More importantly, we find that corporate debt in the PRC is highly "structural," with much of it concentrated in a small fraction of firms, mostly large, state-owned, and listed, while the majority of the other firms have deleveraged continuously over the decade. Remarkably, the implementation of supply-side structural reform in the PRC since 2015 has led to reduced debt ratios and improved the performance of state-owned enterprises (SOEs). Meanwhile, COVID-19 had a limited impact on deleveraging. Deepening capital market reforms to increase the firms' share of direct market financing and accelerating SOE reforms are essential to alleviate corporate debt risk in the PRC.

Suggested Citation

  • Ninghua Zhong & Mi Xie, 2022. "Peoples Republic of China: features and recent evolution of corporate debt," Chapters, in: Benno Ferrarini & Marcelo M. Giugale & Juan J. Pradelli (ed.), The Sustainability of Asia’s Debt, chapter 3, pages 87-107, Edward Elgar Publishing.
    • Handle: RePEc:elg:eechap:20587_3
    as

    Download full text from publisher

    File URL: https://www.elgaronline.com/view/edcoll/9781800883710/9781800883710.00012.xml
    Download Restriction: no
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:elg:eechap:20587_3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Darrel McCalla (email available below). General contact details of provider: http://www.e-elgar.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.