Premier urges no default on private enterprises

"Special actions must be taken to clear the default of government departments and large State-owned enterprises on private enterprises," Premier Li Keqiang urged at the State Council executive meeting on Nov 9.

It has been an emphasized task to ease financing difficulties and reduce financing costs facing the complicated economic situation, the Premier said.

"Neither government departments nor State-owned enterprises should default on private enterprises", the Premier said, adding that it is against the basic duties of a government that should serve its people.

A system must be established for such problems, all the defaults must be cleared in a time limit, and new arrears are strictly forbidden, the Premier said.

"Those in severe arrears of debt will be included in the blacklist for dishonesty, and will be seriously punished," the Premier noted.

For default of local governments and departments on private enterprises, the central government will deduct their deposit in the national treasury or reduce the transfer payments accordingly, Premier Li said.

It was also decided at the meeting that it is necessary to clean up and regulate deposits of engineering construction to increase the default cost of commercial debt.

Premier Li stressed that actions must be taken as soon as possible, with the State Council to take the lead, and relevant departments and the audit department involved.

Results should be reported to the State Council before Spring Festival next year, he added.