On the morning of the 11th, the third plenary session of the Fifth Session of the 12th National People's Congress was held. Before the meeting, Xiao Yaqing, Director of the State-owned Assets Supervision and Administration Commission (SASAC), responded at the "Ministers' Corridor" to the current progress of debt-to-equity swaps at central SOEs, saying that deleveraging and reducing debt are issues that central SOEs will focus on for some time to come, but the current debt risk is safe and controllable, and he is confident about this.

According to Xiao Yaqing, there are a total of 102 central enterprises, and their overall debt ratio is currently 66.6%, down 0.1 percentage point from last year. Among them, 12 have debt ratios exceeding 80%, and 4 exceed 85%. Of these 4, two — China Railway Materials and Sinosteel — have completed restructuring, with their debt ratios dropping below 70%.

"The overall debt ratio, as far as the real economy is concerned, is still relatively stable, and over the past few years it should be said to have been gradually and steadily declining," Xiao Yaqing said. "The overall debt risk is safe and controllable. Both the level of bonds issued and the level of bank borrowing are at relatively reasonable and normal levels, and I am very confident about this."

Xiao Yaqing pointed out that debt-to-equity swaps at central SOEs should pay attention to the following three points:

First, the fundamental way to reduce the debt ratio is for enterprises to increase efficiency; once profitability rises, the debt will gradually come down;

Second, blind investment must be strictly controlled, and expansion purely for the sake of scale, especially financing-related trade, must be strictly prohibited;

Third, enterprise development must be combined with the laws of the market.

Xiao Yaqing said that in terms of supervision, SASAC will strengthen institutional development and enforcement, and will intensify monitoring of early signs of debt danger as well as accountability for violations.

Xiao Yaqing also said that deleveraging and reducing debt are issues central SOEs must focus on in the future, and that the overall debt risk is safe and controllable. This includes bonds, liabilities in production and operations, and bank borrowing, all of which are at reasonable and normal levels.