Under the pressure of debt, China might begin another around of 'debt-for-equity swap'.

In fact, the third plenary session of the 18th CPC Central Committee has accepted the reform pathway of ‘switching from management of the enterprises to management of assets’ proposed by the certain institutions including ANBOUND.

We are of the view that China should not be providing aids to the state-owned economy as this surely will be yet another round of inefficient use of resources.

China should rather put its resources to providing unemployment aids and social security and should never allocate its resources to the state-owned enterprises (SOEs) that are not only inefficient but also too demanding.

Even if this might alleviate the problems faced by SOEs for now, the faulty system and mechanism will once again bring the SOEs into trouble.