Beijing China's planned debt-to-equity swap program will target high-quality companies that face temporary difficulties, a vice chair of China's state planner said in a news briefing on Monday.
Lian Weiliang, a vice chairman of the National Development and Reform Commission (NDRC) also added that so-called "zombie firms" will be strictly forbidden from conducting debt-to-equity swaps, while the authorities will not force banks to conduct the swaps.
The government will not be responsible for losses accrued during the debt-to-equity swap process and the market-oriented swaps will not be a free lunch for firms.
The NDRC earlier released a document ahead of the news conference in Beijing, pledging that China must take action to reduce high corporate debt.
(Reporting by Kevin Yao and Beijing Monitoring Desk; Editing by Kim Coghill)