China debt-to-equity swaps will not be free lunch for troubled firms: state planner

Lian Weiliang, a vice chairman of the National Development and Reform Commission (NDRC) also added that so-called "zombie firms" will be strictly forbidden from conducting debt-to-equity swaps, while the authorities will not force banks to conduct the swaps.

The government will not be responsible for losses accrued during the debt-to-equity swap process and the market-oriented swaps will not be a free lunch for firms.

The NDRC earlier released a document ahead of the news conference in Beijing, pledging that China must take action to reduce high corporate debt.

(Reporting by Kevin Yao and Beijing Monitoring Desk; Editing by Kim Coghill)