| After the financial crisis in 2008,China’s economy has been hit hard.The high-growth economy has problems such as unreasonable resource allocation and overcapacity.China’s banking industry is facing huge debts and the possibility of systemic financial risks is increasing.In 2016,Ministry of Finance of China issued the ―Guidance on market-oriented debt-to-equity swap‖.This is the begining of the second round of debt-to-equity swaps.After that,various ministries and commissions issued several relevant documents on market-oriented debt-to-equity swaps.Several governments of provinces also issued the debt-to-equity swap rules in every region.From July 5,2018,People’s Bank of China decided to reduce the reserve ratio dedicated for market-oriented debt-to-equity swap,which can release about 700 billion yuan in total.In this context,this paper selects the case of Debt-to-equity swap of CSICL to explore the implementation effect.This paper first summarizes the research results of China’s market-oriented debt-to-equity swaps and foreign debt-to-equity swaps and then summarizes the results of market-oriented debt-to-equity swaps in the past three years and the relevant policy.The paper analyzes the connotation and characteristics of market-oriented debt-to-equity swaps.Secondly,it introduces the the way to implement the market-oriented debt-to-equity swaps from five aspects: the choice of the target enterprise,the implementing agency and the source of funds,the implementation model,the pricing method and the exit route of equity.Based on this,this paper introduces the implementation process of CSICL’s debt-to-equity swap and evaluate the effect.Finally,combined with the theory and policy of market-oriented debt-to-equity swaps and the case,the paper provides some suggestions for the continued promotion of China’s market-oriented debt-to-equity swaps,and looks forward its future in China. |
