Currently, the level of the non-financial corporate debts in China has far exceeded those in most of the developed economies and the corporate credit risk is extremely high too, of which the state-owned enterprises (SOEs) are particularly staggering.

ANBOUND's scholars point out that following the accelerated works by all levels of governments on de-capacity and deleveraging, it is expected that there will be more industries with overcapacity and the related enterprises will be exposed to debt crisis.

In order to prevent the problems from getting out of hand and to avoid paying an even bigger price in the future, it is crucial that the decision makers, the local governments in particular, should be determined to take decisive measures when handling the enterprises with overcapacity and the zombie enterprises among the SOEs