Date
25 September 2017

Ex-PBoC adviser backs state cash for reform, WSJ says

The central government should deploy up to 200 billion yuan (US$32 billion) this year to help restructure indebted companies as debt default problems grow, the Wall Street Journal reported Thursday, citing a former central bank adviser.

Economist Li Daokui said the authorities should use budget funds in the second half to promote debt restructuring in some sectors. 

He said a restructuring company’s employees should be first in line for any bailout funds, followed by banks and then nonbank creditors, the report said.

China has had a handful of high-profile bond and loan defaults, it said, and economic growth slipped to 7.4 percent year on year in the first quarter, its slowest pace in 18 months.

But Li said the problems will be manageable with the economy growing at its present pace. 

– Contact HKEJ at [email protected]

RA/SK

 

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