China’s aggressive campaign against debt and financial risk is falling disproportionately on privately owned companies, while highly indebted state-owned groups remain relatively unscathed, according to a major Chinese credit-ratings agencies.

State-owned enterprises accounted for about 55 per cent of total corporate debt, JPMorgan estimated last year. But 83 per cent of companies that have suffered bond defaults since 2014 year were private groups, according to Zhou Hao, president of China Chengxin International Credit Rating. 

At the government’s five-yearly National Financial Work Conference last July, President Xi Jinping said that cutting debt at SOEs was of the “ utmost importance”. The International Monetary Fund has called the rapid rise in Chinese debt “ dangerous”.