IDEAS home Printed from https://ideas.repec.org/p/imf/imfwpa/16-203.html
   My bibliography  Save this paper

Resolving China’s Corporate Debt Problem

Author

Listed:
  • Wojciech Maliszewski
  • Serkan Arslanalp
  • John Caparusso
  • José Garrido
  • Si Guo
  • Joong Shik Kang
  • W. Raphael Lam
  • Daniel Law
  • Wei Liao
  • Nadia Rendak
  • Philippe Wingender
  • Jiangyan Yu
  • Longmei Zhang

Abstract

Corporate credit growth in China has been excessive in recent years. This credit boom is related to the large increase in investment after the Global Financial Crisis. Investment efficiency has fallen and the financial performance of corporates has deteriorated steadily, affecting asset quality in financial institutions. The corporate debt problem should be addressed urgently with a comprehensive strategy. Key elements should include identifying companies in financial difficulties, proactively recognizing losses in the financial system, burden sharing, corporate restructuring and governance reform, hardening budget constraints, and facilitating market entry. A proactive strategy would trade off short-term economic pain for larger longer-term gain.

Suggested Citation

  • Wojciech Maliszewski & Serkan Arslanalp & John Caparusso & José Garrido & Si Guo & Joong Shik Kang & W. Raphael Lam & Daniel Law & Wei Liao & Nadia Rendak & Philippe Wingender & Jiangyan Yu & Longmei , 2016. "Resolving China’s Corporate Debt Problem," IMF Working Papers 16/203, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:16/203
    as

    Download full text from publisher

    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=44337
    Download Restriction: no

    References listed on IDEAS

    as
    1. Yuhao Ge & Hartmut Lehmann, 2013. "The costs of worker displacement in urban labor markets of China," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-23, December.
    2. Y. Ge & H. Lehmann, 2013. "The Costs of Worker Displacement in Urban Labor Markets of China," Working Papers wp876, Dipartimento Scienze Economiche, Universita' di Bologna.
    3. Gray, D.F., 1999. "Assessment of Corporate Sector Value and Vulnerability: Links to Exchange Rtae and Financial Crises," Papers 455, World Bank - Technical Papers.
    4. Claudio Borio & Mathias Drehmann, 2009. "Assessing the risk of banking crises - revisited," BIS Quarterly Review, Bank for International Settlements, March.
    5. Otaviano Canuto & Lili Liu, 2013. "Until Debt Do Us Part : Subnational Debt, Insolvency, and Markets," World Bank Publications, The World Bank, number 12597.
    6. Thomas Laryea, 2010. "Approaches to Corporate Debt Restructuring in the Wake of Financial Crises," IMF Staff Position Notes 2010/02, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. China's Awkward Exchange Rate Regime: an Update
      by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets on 2016-12-26 18:18:37
    2. China: Deleveraging is Hard to Do
      by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets on 2017-07-10 17:37:23

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:bla:glopol:v:8:y:2017:i::p:42-53 is not listed on IDEAS
    2. Mostak Ahamed, M. & Mallick, Sushanta K., 2017. "House of restructured assets: How do they affect bank risk in an emerging market?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 47(C), pages 1-14.

    More about this item

    Keywords

    Corporate debt; China; Credit expansion; Credit booms; Debt strategy; Corporate Debt Overhang; Credit; Restructuring; Hardening Budget Constraints;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:imf:imfwpa:16/203. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jim Beardow) or (Hassan Zaidi). General contact details of provider: http://edirc.repec.org/data/imfffus.html .

    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.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.