Country Steps: Deleveraging Effect and Zhao Chenxin

country steps: This round of debt-for-equity swaps will be performed on a market-oriented basis and in accordance with legal principles, stressed Zhao, adding that no cap will be set on the scale of the program, according to Global Times China. China State Council on Monday released guidelines on the long-discussed debt-for-equity swaps, pledging that the scheme will be conducted in an orderly fashion as the country steps up efforts to tackle high corporate debt. The deleveraging effect of the program should be obvious, and model simulation results show that many companies' debt-to-asset ratios will decrease by about 10 to 20 percentage points, Zhao Chenxin, a spokesman for the National Development and Reform Commission , the top economic planner, said Thursday. High corporate leverage in China has been a major threat to companies' profitability and to broader financial stability. Debt-for-equity swaps refer to transactions in which the debt of a company is exchanged for a predetermined amount of equity of the company. The country total debt surged after the 2008 global financial crisis and its debt-to-GDP ratio was reportedly around 250 percent by the end of 2015. (news.financializer.com). As reported in the news.