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MOTORING ALONG REFINANCING BLUES SOHU PROFITS DIP General Motors reports Banks in China come under Website sees earnings drop record monthly sales pressure to refi nance after advertising sales slow business> PAGE 15 > PAGE 14 > PAGE 16 CHINA DAILY CHINADAILY.COM.CN/BUSINESS TUESDAY, AUGUST 7, 2012 | PAGE 13 TRMB THKD TJPY SEUR SSGBP SSAUD INR SCAD KRW STHB SBRL ONEU$DEQUALS 6.3738 7.7547 78.33 0.8087 0.6423 0.9482 55.46 1.0007 1128.38 31.47 2.0288 SOURCE: REUTERS, 9PM MONDAY Warning issued about high debt Cash-rich Chinese Experts say fi rms urged to new stimulus policies could take acquisition add to fi rms’ fi nancial burden trail to Japan By WEI TIAN By DING QINGFEN In 2011, Haier and the Japa- [email protected] in Yokohama, Japan nese electronics company San- [email protected] yo signed a memorandum of China’s corporate debt ratios understanding about Haier’s have reached “dangerous” lev- It’s been fi ve years since Haier, acquisition of Sanyo’s refrigera- els, according to leading econ- the giant Chinese home appli- tor, washing machine and other omists. ance manufacturer, transferred electrical appliance businesses Li Yang, vice-president its Asia-Pacifi c headquarters to in Japan and some Southeast of the Chinese Academy of Tokyo — and it’s one of the best Asian nations. Social Sciences, a top gov- decisions the company has ever Haier has two research cen- ernment think tank, made, according to its Vice- ters and four manufacturing DEBT has warned that fur- President Du bases in Asia, and targets sales ther stimulus policies Jingguo. revenues worth 50 billion yen could add to the already heavy “There are ($635 million) in Japan this burden of corporate debt that so many busi- year, up from last year’s 10.8 bil- is weighing on the world’s sec- ness opportu- lion yen. ond-largest economy. nities in Japan, China’s corporate debt-to- GOINGL not only for big Overseas drive GDP ratio stood at 107 per- GLOBAL Chinese com- A component of the Chinese cent in 2011, the highest in the panies like ours, government’s 12th Five-Year world, Li said at a forum in but also for small Plan (2011-15) is to encourage Zhejiang province on Friday. and medium-sized ones,” said domestic companies of all types A ratio that exceeds 90 per- Du. and sizes to invest overseas. cent is considered “danger- As financial pressures grip Industries suggested as priori- ous”, he said, citing a standard so many parts of the globe, Du ties include the energy, manu- set by the Organization for PROVIDED TO CHINA DAILY said that it’s a comfort to know facturing, service and infra- Economic Cooperation and A branch of the Industrial and Commercial Bank of China Ltd in Beijing. China’s corporate debt-to-GDP ratio stood at 107 percent that Japan remains in such structure industries. Development. in 2011, the highest among all countries, raising concern about their fi nancial stability. good shape, despite the natu- As the European debt crisis Li Zhenyu, rating director of ral disaster which it suffered has spread, European nations China Lianhe Credit Rating Co of the State Council’s Develop- “Many State-owned enter- ment and private investment non-fi nancial companies was last year. with growing numbers of vul- Ltd, said the fi gure is likely cal- ment Research Center. prises have seen their debt could provide financing to 59.2 percent in the fi rst quar- He said at a time when so nerable companies in need of culated by taking the total debt “But large Chinese compa- ratio lowered in recent years, companies help lower debt ter, which was up 7 percentage many companies in China are capital have been widely seen Chinese banks carry from loans nies’ debt burden is indeed while they are in the process ratios. points from fi ve years ago. being encouraged to look over- as ideal hunting grounds for and other methods of borrow- increasing because of the of getting listed..., ” Li said. “It’s hard to say whether cor- “In fact, the Chinese econo- seas for new business opportu- acquisitive Chinese compa- ing, such as corporate bonds, strong momentum seen in “But, during the current eco- porate debt ratios are under my was running on one of the nities, as the economy at home nies. and dividing it by the country’s fixed-asset investments after nomic downturn, we may see control,” Wang was quoted by highest leverage ratios in the slows, Japan is still teeming with But Zhao Xiaogang, chair- GDP. 2008.” an increase in the bankruptcy China National Radio as saying. world in early 2000... Th at was opportunities that are too good man of CSR Corp Ltd — one Data from the China Bank- Chen said the average debt- rate.” “But once these troubles a result of high deposit ratios to ignore. of China’s train makers — add- ing Regulatory Commission to-asset ratio of Chinese com- The average debt ratio break out in one company, and underdeveloped fi nancing “Japanese companies are ed the picture in the troubled show China’s banking system panies with more than 20 mil- among listed SOEs, he said, that may cause a chain reac- markets.” packed with talent and many eurozone remains blurred in his had 55 trillion yuan ($8.63 lion yuan in annual revenue is above 60 percent, adding tion and lead to a debt crisis.” Fan said the Chinese govern- possess just the kind of qualities opinion, and that investment trillion) in outstanding loans was about 40 percent. Some that 70 percent is normally the Fan Junlin, a senior analyst ment has the fi nancial where- that appeals to Chinese busi- closer to home might be more by the end of 2011. Th e coun- industries, such as civil avia- highest acceptable rate. at the Agricultural Bank of withal to pay off the debts of ness. sensible at this time. try’s GDP for the same year tion, are saddled with espe- “A high debt ratio is largely China, expressed more opti- companies in the country. “We share high levels of tech- “I would suggest a more cau- exceeded 47 trillion yuan. cially high debt ratios. the result of a lack of fi nanc- mism. “Meanwhile, another nology, innovation and have the tious ‘wait-and-see’ approach in “The figure doesn’t reveal Chen said corporate debt is ing channels,” said Wang “Some said China would fol- important contributor to same business culture,” added Europe, until the time is abso- the financial positions of par- still increasing at a faster rate Yuanjing, a researcher at the low Japan on the path toward Japan’s recession, a sharp Du. lutely right. Th e price of many ticular companies,” said Chen than revenues and he knows National Development and two decades of stagnation aft er decline in property prices, will However, Japan is certainly deals might look attractive, but Daofu, policy research chief at of no evidence suggesting debt Reform Commission. debt troubles broke out, not- not happen in China at this not immune from the same eco- that doesn’t necessarily mean the Financial Research Institute ratios are decreasing. Wang said equity invest- ing that the debt ratio among moment either,” he said. nomic pressures affl icting other they are good deals.” parts of the world. Zhao said he, like many Th e third-largest economy is investors, is more certain about still recovering from last year’s Japan than he is about Europe, devastating earthquake and tsu- and his organization is planning nami and nuclear crisis. further cooperation with the Citigroup launches China share sale venture Recent data showed that counterparts there. Japan, one of the world’s top “Amid the downward pres- By BLOOMBERG in shanghai bank now owns 33.3 percent in exporters, is not exporting nearly sures at home, we cannot Citi Orient, with the rest held by as much as it used to, hurt too perform in a market which is Citigroup Inc, the third-larg- the Chinese partner. by a strong currency, which is shrinking. est US bank by assets, started “We have very high expecta- making the country’s products “We want to join hands with an investment-banking joint tions of this joint venture. Our expensive to foreign buyers. Japanese companies, to try and venture in China that will give goal is for this to become a lead- Th e Bank of Japan has fore- develop our business especially it access to the world’s second- ing investment bank in China,” cast the country’s economy will in emerging markets, includ- biggest market for share sales. Bird said, adding that the ven- grow 2.2 percent this year and ing Singapore and Hong Kong,” Pan Xinjun, chairman of ture has about 200 executives 1.7 percent the following year, said Zhao. partner Orient and a “very strong” pipeline of and many Japanese companies “Chinese and Japanese com- DEALS Securities Co, will deals. are at the brink of bankruptcy. panies are highly complemen- head the venture’s Shengman Zhang, Citigroup’s “Japan’s economic activity tary to each other.” six-member board of direc- co-chairman of Asia-Pacific has started picking up mod- His Zhuzhou-based train tors, and Ma Ji will be CEO, the operations and Farhan Faruqui, erately as domestic demand maker in Hunan province is New York-based bank said in head of corporate and invest- remains fi rm, supported main- already cooperating with more an e-mailed statement on Mon- ment banking for the region, ly by reconstruction-related than 20 Japanese partners, day.

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