Chinese banks urged to tackle loss-making 'zombie firms' as part of reform

Beijing is promoting supply-side structural reform.

Reuters said China's top banking regulator has told banks to reform by tackling China's "zombie firms", control regional housing market bubbles and push forward with debt to equity swaps, according to a statement posted on the regulator's website late Friday.

"Guo Shuqing, who was appointed chairman of China's banking regulator in February, met with representatives from a number of the country's largest commercial banks on Friday to check up on their progress implementing the central government's reform agenda. Beijing is promoting supply-side structural reform as a solution to industrial capacity and cutting its reliance on debt-driven growth policies. Guo has vowed to clean up "chaos" in the country's banking system," noted Reuters.

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