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| Author: | Li, Yafei |
| Title: | Reasons for heavy debts of state-owned enterprises and ways out (original in Chinese) |
| Journal: | China Reform (c)
1998 : 7, p.18-19 |
| Index terms: | PUBLIC CORPORATIONS DEBT MANAGEMENT CHINA |
| Language: | chn |
| Abstract: | According to investigation, the average ratio of assets and liabilities has reached 72 per cent. Heavy debts not only cause serious problems for the operation of state-owned enterprises, but also increase banks' bad debts dramatically and therefore bear the seed of great financial risks. The basic reasons for the emergence of such phenomenon is that state-owned enterprises, in their full sense, are not the subjects of benefits in the market competition; that the state-owned nature of commercial banks fails to constitute hard restraints on state-owned enterprises; that traditional mode of thinking supports the existence of state-owned economy and enterprises as well as maintain the soft economic restraints which are determined by their nature. At present, the solution of high debts is to sell small and medium-sized state-owned enterprises on auction market. |
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