The State Council has agreed to establish an inter-ministerial joint meeting system to actively and steadily reduce enterprise leverage, according to a circular released by the State Council General Office.

Led by the National Development and Reform Commission (NDRC), the joint meeting will consist of 17 ministries and commissions, including NDRC, the ministries of Finance, Industry and Information Technology, and Commerce, and the State-owned Assets Supervision and Administration Commission. Xu Shaoshi, head of NDRC, will serve as the convener.

Under the leadership of the State Council, the joint meeting will have the following main functions: develop supporting documents on reducing corporate leverage; organize debt-to-equity swap pilots; develop and implement supporting and supervision policies; analyze the debt issues of non-financial enterprises and propose solutions; solve issues that occur in the process of leverage-reducing through timely coordination, and set up a mechanism to punish illegal and fraudulent activities.

The joint meeting will also be responsible for communicating with local governments, and guiding them to build a favorable financial environment and provide sufficient support for leverage reduction.

A mechanism of collecting and reporting information on leverage reduction will be set up to evaluate the implementation of related policies, according to the circular.

In addition, the joint meeting should establish effective communication and coordination with provincial governments and related banks and institutions.