The solid implementation of the policies to deleverage and cutting overcapacity means a matter of life and death to many enterprises.

Take the coal industry as an example; most of the coal-producing enterprises in Shanxi, the biggest coal producing province in China is struggling.

ANBOUND's research team is of the view that in order to solve the problems faced by the coal industry, the government should take a bold step by privatizing the relevant state-owned enterprises (SOEs) and allow the social capital to save the SOEs from their predicaments.

However, the government should address these three issues: -

(i)The policy introduced should allow the capable private investors to restructure the SOEs[

(ii)The property rights should be defined clearly and accord legal protections to the social capitals;

(iii)Liberate the mind and avoid turning the fears of losing state-owned assets into man-made barriers to the asset restructuring.