Corporate's non-performing assets ruin the industrial sector's profitability, trigger financial crisis, and, ultimately, the banks will be dragged by the bad loans. The decreasing of GDP growth is significantly correlated with the rising of non-performing rate of the banking sector. As the Chinese economy is entering a downturn stage of growth, the number of firms in crisis will increase, and banks' bad loans will also increase. A large number of non-performing assets will be disposed, restructured, re-allocated by the professional institutions in order to restore the liquidity of capital. Non-performing assets is estimated to come from provincial or local financing platforms, real estates, and some other industries. Investment institutions may invest in varieties of non-performing assets and increase their values in different ways. Investment institutions can lower the cost of acquisition, provide professional services to enterprises in crisis, and establish the Restructuring Fund to promote industrial mergers and restructuring.
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