Deleveraging Is A Necessary Climb After Entering The New Normal.

China's economic leverage ratio, especially the enterprise leverage ratio, has been the focus of attention for some time.

According to the institutions of the Chinese Academy of Social Sciences and the international clearing bank, the overall leverage ratio of China's economy is around 250% at the end of 2015, and it is a medium level among the world's major economies.

However, the level of leverage of Chinese enterprises is obviously high, and the above institutions are estimated to be between 130% and 170%, which is larger than most of the major economies.

Recently, the State Council officially promulgated the "opinions on actively and steadily reducing the leverage ratio of enterprises" (hereinafter referred to as "opinion") and its annex "on market-oriented banks".

The guiding opinions on stock ownership (hereinafter referred to as "guiding opinions").

This is an important document for our country to prevent and defuse the debt risk of enterprises, and it is also an important measure to push forward the structural reform of supply side and enhance the economic development in the medium and long term.

The leverage ratio of China's enterprises is high, with high savings rate, high proportion of indirect financing, and special national conditions, and debt risk is generally controllable.

But the risk factors contained in high leverage should not be ignored.

From the international experience, the further increase of leverage at high leverage level has a strong relationship with the outbreak of financial risks. Most countries experiencing financial crisis in history have experienced a rapid and leverage process.

From the domestic situation, in recent years, due to the high leverage ratio of enterprises, the scale of debt growth is too fast and the debt burden is heavy.

Under the background that the international economic environment is more complex and the downward pressure of China's economy is still large, some enterprises are facing more difficulties in operation.

For this reason, we must prepare for the rainy day. We should follow the bottom line thinking, take the initiative as the risk of slow release, and not sit idly by and expand the risk continuously.

The Party Central Committee and the State Council attached great importance to debt risk issues. From the strategic height, we made decisions and arrangements for reducing the leverage ratio of enterprises, and DELEVERED as one of the five major tasks of supply side structural reform. The introduction of the opinion indicates that deleveraging has entered the stage of substantive implementation.

In the current situation, developing leveraged enterprises with demand and qualified conditions can effectively enhance the capital strength of enterprises and prevent corporate debt risks. It helps to help quality enterprises to reduce efficiency, enhance competitiveness and promote survival of the fittest. It is conducive to the realization of multi ownership of enterprises, promoting restructuring and restructuring of enterprises, improving modern enterprise system, accelerating the construction of multi-level capital market, improving the proportion of direct financing and optimizing the financing structure, which is an important combination point of steady growth, reform, structural adjustment and risk prevention.

To reduce leverage, we must insist on marketization and rule by law.

At present, China has established a socialist market economic system, and the ownership structure is more diversified. Banks and enterprises are independent entities of the market.

During the period, the relationship between "left pocket and right pocket" is not allowed to take any administrative or policy levers in the past.

In the third Plenary Session of the 18th CPC Central Committee, the party put forward the market to play a decisive role in the allocation of resources. In the fourth Plenary Session of the 18th CPC Central Committee, we proposed that we should comprehensively promote the rule of law. This requires that we should adopt a market-oriented rule of law as well as other economic work.

On the other hand, at present, China also has better conditions for marketization, rule by law and leverage reduction. Laws and regulations such as company law, securities law, enterprise bankruptcy law, and registered capital registration regulations have been relatively complete. Banks, financial Asset Management Co and corporate governance structures are more perfect, capital markets are more mature, and they have accumulated rich experience in asset disposal, enterprise restructuring and capital market business.

Therefore, the "opinions" and "guiding opinions" have established the principle of reducing the leverage and debt to equity in the way of marketization and rule by law, that is, the market participants carry out or participate in related activities and pactions according to their own regulations according to their own needs according to their own needs.

Taking the debt to equity swap as one of the ways to reduce leverage, the guiding opinions put forward that the equity swap enterprises, the scope of creditor's rights, the pricing of conversion shares, the implementing agencies, the equity management and exit are all determined by the market participants independently. The capital needed for the debt to equity swap process is also mainly raised by marketization. The market owners are at risk and enjoy their own profits. The government does not shoulder the responsibility for the loss, and does not interfere in the specific matters of debt to equity swap. These are essentially different from the last round of policy debt to equity swap in the late 90s.

To reduce leverage, we need to adopt classified strategies and step by step.

China's economic development has entered a new normal, and there has been a trend of industrial differentiation. The growth trend of different industries is different from that of leverage.

At present, highly leveraged enterprises are mainly concentrated in raw materials, electricity, coal, energy, heavy chemical industry, iron and steel, nonferrous metals, road and railway industries, while the Gao Ganggan problem of pharmaceutical, leather products, food and beverage, light industry and medicine, biology, consumption, technology, Internet and other new kinetic energy industries is not outstanding.

Therefore, the "opinion" proposes that deleveraging should be classified according to the strategy, because enterprises should implement policies, support and control, and not engage in one size fits all.

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For highly leveraged enterprises, measures should be taken to reduce leverage, and enterprises with low leverage and high growth enterprises should respect economic laws and determine reasonable leverage levels according to their own needs.

At the same time, we should step by step to reduce leverage. We must realize that leveraged levers are too fast and risky.

The decline of enterprise leverage requires a process and a certain period of time. This is determined by objective laws. We must not be too hasty and eager for success.

"Opinions" stressed the need to carry out the work of reducing leverage in a safe and orderly manner, grasp the relationship between steady growth, structural adjustment and risk prevention, and guard against and mitigate all kinds of risks that may arise in the process of lowering leverage.

The reduction of leverage needs comprehensive policy and synergy.

The reasons for the formation of high leverage in China's enterprises are more complicated. They are not only institutional and institutional problems, but also factors of economic development environment and conditions. There are both structural and cyclical factors. Therefore, comprehensive measures should be taken to improve the effectiveness of policies.

To this end, the opinion put forward.

We should improve the modern enterprise system, strengthen self-restraint, revitalize the stock assets, optimize the debt structure, orderly carry out the seven ways to reduce the enterprise leverage ratio, such as the marketization of bank creditor's rights to equities, bankruptcy in accordance with the law, and the development of equity financing. These measures have both long-term mechanism for institutional improvement, and practical measures for short-term practical effectiveness. They also prevent and defuse the high leverage risk, reflecting the current and long-term considerations.

At the same time, the "opinions" also focus on the combination of reducing leverage and restructuring and restructuring enterprises, reducing the cost of real economic enterprises, resolving excess capacity, and promoting pformation and upgrading of enterprises.

The leveraging process involves creditors, shareholders, investors, employees and so on. The interests are complex, the trading links are numerous, the negotiation is difficult, and there are some difficulties in promoting them. There are also moral hazard such as evasion of debts, adverse selection, and the possibility of illegal behaviors.

In order to actively and steadily push forward the implementation of the deregulation work, it is necessary to formulate corresponding incentive measures to enhance the enthusiasm of all parties involved in the reduction of leverage. At the same time, we must make restrictive arrangements for possible moral hazard, illegal activities and inappropriate behaviors, so as to ensure the orderly and orderly development of the reduction of leverage.

In terms of incentive measures, the measures put forward by the opinions and guidance are to create a good policy environment.

Through the implementation and improvement of relevant tax policies, we can reduce the tax burden of enterprises in the process of reducing leverage, and further encourage and guide lower leverage according to the need of financial support. By proposing the types of enterprises that encourage debt to equity swap and strengthening positive guidance, we should enhance the ability of banks to reduce their leverage by broadening the channels of pfer of non-performing assets market, promoting the securitization of non-performing assets of banks, and supplementing bank capital through multiple channels. By improving the supporting policies for reducing the burden of enterprises, we will create more favorable conditions for reducing the burden of enterprises to go to light companies. By implementing the industrial pformation and upgrading and resolving the supporting measures of excess capacity, we will provide a better industrial and market environment for the development of leveraged enterprises; and support the stability and distribution of enterprises and workers, so as to reduce the impact of reduced leverage on social stability.

In terms of restrictive measures, the measures put forward by the opinions and guidance are to establish effective external restraint mechanisms.

通過對相關單位及個人建立信用記錄并納入全國信用信息共享平臺、構建參與各方失信行為聯合懲戒機制、依法嚴格追究惡意逃廢債和國有資產流失等違法單位及相關人員的責任來加強市場主體的信用約束;禁止僵尸企業、惡意逃廢債企業、債權債務關系不明晰企業、助長過剩產能擴張和增加庫存企業等四類企業債轉股，有效防范道德風險;規范債轉股企業和股東資產處置行為，嚴格禁止債轉股企業任何股東特別是大股東掏空企業資產、隨意占用和挪用企業財產等侵害其他股東權益的行為，防范債轉股企業和實施機構可能存在的損害中小股東利益的不正當利益輸送行為;通過依法建立合格個人投資者識別風險和自擔風險的信用承諾制度來健全投資者適當性管理制度，防止不合格個人投資者投資降杠桿相關金融產品和超出能力承擔風險。