Enterprise High Debt And Systemic Financial Risk Analysis

With the rapid growth of China’s economy turn to the high-growth, optimization and upgrading of industrial structure, the economy enter the New Normal, the chinese companies face both opportunities and challenges, but in recent years, companies with high debt is gaining widespread attention of scholars and fears are rising gradually. In the18th CPC National Congress, Premier Li Keqiang stressed the need to strictly observe the bottom line of constract a regional financial systemic risk. To investigate the relation of current situation of enterprises with high debt and systemic risk is of great practical importance.This paper uses qualitative and quantitative methods, view companies with high debt problems in a longer span of history. The second chapter explain the theoretical basis of the article, and systemic risk is defined to be explored. The third chapter describes debt scale, debt structure, high debt concentrated industries, found that of the corporate sector debt to GDP ratio far exceeds the safety value, diversified sources of debt and bank loans dominate debt industry, mainly in the real estate and capital-intensive industries with excess capacity. Then describe debt history and compared with current Chinese enterprises.The forth chapter try to explore business with high debt may lead to systemic risk. bring their own risk, then from four sources to explore the risk of corporate debt of shadow bank, corporate bonds and industry. Next, based on the characteristics of China’s current economic and business characteristics, determine the risk of high debt companies may form two aspects of systemic risk: banks and shadow banks. Systemic risk and other financial institutions with the increasingly close relationship and transmitted to the entire financial system. According to the analysis, we found that the risk of conduction interwoven into each other networks. Finally, the fifth chapter makes some policy to prevent systemic risk.