2016-06-21

No Improvement for Chinese Commodity Producers

BI: A staggering number of Chinese commodity producers are still losing money
"These loss-making companies remain operational largely due to local government interest to maintain employment. Banks too are reluctant to declare nonperforming loans, helping keep these enterprises online," says Dhar.

"More importantly, the structural increase in loss-making commodity production over the last few years underscores the need for systemic supply-side reform. We believe these changes are required sooner rather than later given the importance of productivity in China's transition to a services-based economy."

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