Chapter 167

After Qi Tongwei conducted field visits to several enterprises, a number of issues became starkly clear. These included heavy debt burdens. Due to overinvestment, poor management, or the burden of social responsibilities, certain state-owned enterprises had accumulated massive debts, leading to escalating financial risks. Between some local governments and state-owned enterprises, there existed a phenomenon of soft budget constraints, whereby governments subsidized or bailed out loss-making state-owned enterprises, stripping them of any incentive to improve operations and raise efficiency.