Research On The Problems Of The Liability Converting To Equity Under The Background Of Supply-side Reform

While the China’s economic restructuring has been in key node,the structural reform of the supply-sideis the critical point of the current round of economic restructuring.The supply-side structural reform mainly includes five aspects: address overcapacity,reduce inventory,deleverage,lower costs,and bolster areas of weakness,the debt-to-equity swap plays an important role in addressing overcapacity,deleverage,lowering costs.At present,China’s economy is facing the three period superimposed issue(simultaneously deal with the slowdown in economic growth,make difficult structural adjustments,and absorb the effects of previous economic stimulus policies),the bank NPL(Non-performing Loan)ratio rose,corporate solvency decline issues etc.the debt-to-equity swap is compromise strategy after the long-term economic development was balanced against the short term supply-side structural reform(address overcapacity,reduce inventory,deleverage,lower costs,and bolster areas of weakness).Now the steady development of economy has already been seriously restricted by the issues like departure from the cross bank incentive,enterprise absolute rising debt levels,increased leverage ratio,increased tail risk.Now the main problem that restricts economic development is that the effective supply cannot meet the demand,the conditions that stimulate economic development continue to improve,while the level of productivity is in the low-speed growth state.Coal,iron and steel,cement and other traditional industries have serious problem of overcapacity,but the development of high-tech industry is slow,resulting in a serious imbalance in economic structure.In order to continue to maintain the healthy and stable growth of the national economy and promote the structural reform of the economic system,the state put forward the strategy of marketable debt-to-equity swap.The implementation of the debt-to-equity swap policy helps the adjustment of the supply side structure,promotes the balanced development of the economy and release new economic growth point,and promotes the stable and healthy development of the national economy.Based on the macro background of economic system reform,the paper elaborates the synergistic effect of debt to equity swap on the supply side structural reform.Firstly,the paper elaborates the researches on debt to equity swap at home and abroad,furthermore,there is a realistic judgment on those researches.Secondly,the paper introduce the related theory of debt to equity swap through the detail description of different theories at home and abroad from different perspectives of the debt to equity swap,then there is a comprehensive understanding of debt to equity swap.Thirdly,in the combination of debt to equity swap and supply side reform,the current round of debt to equity swap is the background of the adjustment of the national economic structure,and through the detailed analysis of the structural reform of the supply side and the analysis of the current round of debt to equity swap,then get the relationship between those two side and the significance of the current round of debt equity swap.Fourthly,through the comparative analysis of debt to equity swap at home and abroad,lesson learned during implementation and implementation difficulties in the implementation process will be summarized.Finally,based on the current national strategy and economic development and the relevant experience theories,solutions to the plight of implementation will be concluded.Referential significance of the smooth implementation of debt to equity swap will be in place.