Research On Difficulties Of The Debt For Equity Swap Implemented In The State-owned Enterprises Reform In China

In recent years, the non-performing loans issue in Chinese banking sector and the low efficiency of state-owned enterprises (SOEs) have become a matter of overall importance, which will inevitably influence the pace of China's reform policy and the economy safety. In order to improve the asset quality and mitigate financial risks, four asset management companies were approved to established in 1999 by the central government to acquire, manage and dispose the non-performing assets from the four state-owned commercial banks. All of them initiated with the debt for equity swap. However, with nearly two years' practices, it proves to be unsatisfactory.This thesis reviews the over twenty-year history of state-owned enterprises reform and analyzes the SOEs' status quo and the cause thereof. It reveals the characteristics of debt for equity swap practice and points out its necessity and function both theoretically and practically. At the same time, it thoroughly analyzes the cause for its slow progress and difficulties it confronts when it is implemented in China. On this basis, it puts forward a series of measures to accelerate the implement of the debt for equity swap in China.