Many Firms In China's Third-biggest Province Struggling to Pay Debt

Many privately held firms in Shandong, China’s third-biggest province by economic output, are struggling to repay short-term debt due to declining industry fundamentals, entangled cross guarantees and ill-managed investments, S&P Global Ratings said, Reuters reported. China’s slowing economy and enforcement of environmental protection rules have pressured the profitability and cash flow of Shandong companies in over-capacity sectors including oil refining, petrochemicals, steel, aluminium and textiles, S&P said. “The Shandong economy is skewed toward gritty smoke-stack industries where companies are typically highly leveraged,” said Chang Li, China country specialist for S&P Global Ratings. Read more