By IMFBlog

December 11, 2017

Version in 中文 (Chinese), 日本語 (Japanese)

IMF research shows that resolving China’s zombie firms can boost productivity and long-term growth prospects (photo: DNY59/iStock by Getty Images).

China’s “zombies” are non-viable firms that are adding to the country’s rising corporate debt problem, and are bad business. Zombie firms are highly indebted and incur persistent losses, but continue to operate with the support of local governments or soft loans by banks—adding very little value to economic prospects. China has already made a lot of progress in resolving these firms, and should continue its efforts to send the zombies packing. […]