HONG KONG: For all Premier Li Keqiang’s rhetoric about unrelenting economic reform, companies listed in Shanghai are building up debt at the fastest pace in three years as it gets harder to finance growth from earnings.
Total debt at 1,003 Shanghai-traded nonfinancial firms increased 18% in the last 12 months, the fastest pace in three years, to a record 868.3 billion yuan (US$136bil), the latest Bloomberg-compiled filings show. The debttocommon equity ratio, adjusted for market value, has risen to 123.1% from 121.5% a year ago and 88.7% back in 2010.
