The lack of support for China Huarong from the central government deepens concerns over the level of support for state-owned enterprises, reported Bloomberg.
Despite efforts by local governments, state-owned enterprises in agriculture-reliant province Henan and coal-producing province Shanxi are having a difficult time selling bonds. According to Bloomberg, new debt by nonfinancial state-owned enterprises in Henan jumped to 67% while sales in Shanxi dropped 75%.
Firms in poorer provinces are struggling to raise enough money to repay their debt and authorities have made it clear that poorly run state-owned enterprises and local government financing vehicles will not receive backing at the provincial level.