BEIJING: Chinese companies are operating with "alarming levels" of corporate debt, even though the country's gross debt remains relatively low, according to a study by an official Chinese think tank.
"The high level of corporate debt deserves our attention," warned Li Yang, vice president of the Chinese Academy of Social Sciences (CASS), at an annual public conference held by the International Organization of Securities Commissions ( IOSCO) here.
Li and his team will publish their findings of their one-year study on China's government debt, corporate debt and individual borrowing next month.
China's debt levels are still rising and will continue to climb in the future if the current global financial crisis persists, state-run Xinhua news agency quoted Li as saying.
Without providing actual debt figures, the report quoted the study as saying that China's debt-to-GDP ratio stood at 168.9 per cent, lower than the global average of more than 200 per cent.
According to a recent statement by Yang Kaisheng, president of the Industrial and Commercial Bank of China the debt held by the local and central governments of China amounted to about $2.78 trillion, about 43 per cent of the country's gross domestic product.
The debt-to-asset ratio of Chinese enterprises reached 105.4 per cent, ranking the highest of the 20 countries Li's team study said.
"It's a kind of comfort for China, as the country's gross debt is still within a healthy range," Li said, adding that China's debt levels are still a long way from those of the US and Japan.
If China's economy maintains steady growth, high debt levels will be no problem for Chinese companies, Li said, adding that companies will have difficulties repaying their debts in the event of an economic decline.
indiatimes.com
"The high level of corporate debt deserves our attention," warned Li Yang, vice president of the Chinese Academy of Social Sciences (CASS), at an annual public conference held by the International Organization of Securities Commissions ( IOSCO) here.
Li and his team will publish their findings of their one-year study on China's government debt, corporate debt and individual borrowing next month.
China's debt levels are still rising and will continue to climb in the future if the current global financial crisis persists, state-run Xinhua news agency quoted Li as saying.
Without providing actual debt figures, the report quoted the study as saying that China's debt-to-GDP ratio stood at 168.9 per cent, lower than the global average of more than 200 per cent.
According to a recent statement by Yang Kaisheng, president of the Industrial and Commercial Bank of China the debt held by the local and central governments of China amounted to about $2.78 trillion, about 43 per cent of the country's gross domestic product.
The debt-to-asset ratio of Chinese enterprises reached 105.4 per cent, ranking the highest of the 20 countries Li's team study said.
"It's a kind of comfort for China, as the country's gross debt is still within a healthy range," Li said, adding that China's debt levels are still a long way from those of the US and Japan.
If China's economy maintains steady growth, high debt levels will be no problem for Chinese companies, Li said, adding that companies will have difficulties repaying their debts in the event of an economic decline.
indiatimes.com
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