“Company debt problems today can become systemic debt problems tomorrow. Photo: BloombergShanghai: China must act quickly to address mounting corporate debt, a major source of worry about the world’s second-largest economy, a senior International Monetary Fund (IMF) official said on Saturday. Lipton said corporate debt in China stands at about 145% of gross domestic product, a high ratio. He singled out state-owned enterprises, which he said accounted for about 55% of corporate debt but only 22% of economic output, according to IMF estimates. “The lesson that China needs to internalize if it is to avoid a repeating cycle of credit growth, indebtedness, and corporate restructuring, is to improve corporate governance,” he said.

Source: Mint June 11, 2016 07:41 UTC