Beijing's Debt Swap Program Takes Shape

China is ramping up its campaign to rehabilitate ailing state-owned enterprises. On Oct. 10, China's Cabinet published new guidelines for the debt-to-equity swap program Beijing unveiled earlier this year. A week later, Chinese news outlet Caixin reported that Yunnan Tin had become the first provincial state-owned enterprise to put the framework into practice by striking a debt swap agreement with China Construction Bank, one of China's "Big Four" state-controlled banks. Several other enterprises will likely soon follow Yunnan Tin's lead; China Construction Bank has reportedly begun talks with at least 50 companies. Though Yunnan Tin's precedent sheds light on many aspects of the debt-to-equity swap protocol, it does not clear up the fundamental questions of how and why companies are selected for the program. ...