The plan specifically forbids central government agencies and local governments from providing subsidies or loans to prop up the operation of state-owned firms that would not be financially viable without such help, which are known as zombie enterprises. Photo: Xinhua

China cracks down on subsidies to zombie companies as US trade war hits economy

  • Reforms intend to encourage insolvent firms to close down so resources can be better allocated in the economy as Donald Trump’s tariffs take effect
  • Plan unveiled just a day after it was confirmed gross domestic product (GDP) growth slowed to 6.2 per cent in the second quarter of 2019, the lowest on record
Topic |   China economy

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The plan specifically forbids central government agencies and local governments from providing subsidies or loans to prop up the operation of state-owned firms that would not be financially viable without such help, which are known as zombie enterprises. Photo: Xinhua
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