Research On China's Debt-equity Swap In The Implementation Process

College of Economics & Trade, Southwest Agricultural University Beibei, Chongqing, China, 400716 ABSTRACT The paper is focused on the problems that appeared during the progress of Swap of Debt to Equity (SDE). SDE is a special policy, through which Chinese government wants to dissolve the unhealthy credit and debt relationship between state-owned banks and state-owned enterprises. Because of the unique system background and national conditions, we have a long way to go to realize the SDE. On the basis of theoretical analysis and motive analysis, the paper shows the main problems appeared during the progress of SDE and their causes then gives appropriate measures. As the research shows, the target of SDE is to maximize the assets and minimize the loss, and then thoroughly improve the profitability of SDE enterprise. During the progress of SDE, the main difficulties include moral hazard, the risk of equity management, the risk of equity quit, lack of effective support of law, etc. The causes of these difficulties embrace social mentality, the shortcoming of policy design, abnormal assets humanization of relevant enterprise, irregularity of capital market, etc. To realize SDE successfully, these measures should be taken. ? Change people抯 ideal and give SDE correct comment. ? Build up effective mechanism to administer AMC. ? Control moral hazard. ? Regulate corporate administer of SDE enterprises. ? Combine SDE and the strategic secession of state-owned economy. ? Develop Chinese capital market. ? Modify social security system of China.