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China Shocker: A Quarter Of All Companies Can't Pay The Interest On Their Debt

• http://www.zerohedge.com, by Tyler Durden

Months later this has manifested in a countrywide push for debt-for-equity exchanges, and outright bankruptcies including the first ever liquidation of a Chinese state-owned enterprise.

While dramatic, the question remained: what about other Chinese companies not directly involved in the commodity space? We now know the answer: according to Reuters, profits at roughly a quarter of all Chinese companies were too low in the first half of this year to cover their debt servicing obligations, i.e., merely the mandatory interest payment let along debt maturities, as earnings languish and loan burdens increase.

So with unprecedented debt - and as the IIF chart below shows, China's total debt/GDP of 300% has never been lower ...

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