Equity for Debt Swaps in Chinese Big Business: A Case Study of Restructuring in One Large

This paper examines China’s equity-for-debt swap program through a detailed case study of the reform process in one state-owned enterprise. We use a property rights conceptual framework to examine the extent to which Asset Management Companies have been able to exercise their ownership rights as well as related reforms to wage structure, managerial appointments and separation of social welfare responsibilities. Our main finding is that the Asset Management Companies have been unable to exercise their bundle of ownership rights. On the basis of this finding we suggest that it is going to take much longer for the Chinese government to realize its objectives compared with many previous debt-workout programs such as Savings and Loans reform in the United States