China's new round of debt-to-equity swap has begun, and the Chinese government eagerly hopes to reduce 120 trillion Renminbi corporate debts, and eventually convert up to 3 trillion Renminbi of outstanding loans into equity. However, Anbound's senior researcher He Jun believes that several problems remain; If there is no supporting state-owned enterprise management system reform, creditors of state-owned enterprises will have no say in corporate governance, and it would be hard to realize added value for state-owned enterprises’ asset quality. It remains a question of this round of debt-to-equity swap will be done through the market approach, and the banks will not be willing to be responsible for debt-to-equity swap. If no supporting reform is done, the prospect of this round of debt-to-equity swap will not be optimistic.