Feasible Deleveraging Options for Chinese Corporations: The Experiences of the United States and Japan

Abstract

 Non-financial sector’s leverage ratio of China has been rising rapidly after the 2008 financial crisis, and it is mainly manifested by the high debt leverage ratio of the non-financial corporations’ sector, while this structural contradiction has not been apparent in developed countries and other emerging market countries. This paper takes the United States and Japan as research objects, comparatively analyzes the feature and countermeasures of debt leverage in the United States after the 2008 financial crisis and Japan's post-1990 financial crisis. Based on the actual situation of Chinese corporations' leverage, the reasonable transfer of leverage between macro-sectors (government sector, households sector and nonfinancial corporations sector), the gradual elimination of backward production capacity, and the improvement of the company's production and operation capabilities are of great significance to the high debt leverage of Chinese corporations.