Asia is world's largest producer of ‘zombie' firms, IMF warns

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The IMF warned that “zombie companies” — whose earnings haven’t covered interest payments for at least three years — now comprise more than a fifth of Asia’s outstanding corporate debt, potentially posing a systemic risk.
Zombie firms’ debt share has more than doubled since 2008. “This rising share of corporate debt is increasingly concentrated in firms that cannot service it,” the IMF wrote.
The problem appears to be growing in China: Natixis analysts said that state policies supporting advanced industries like semiconductors aided “their rapid development but not their profitability,” the Financial Times wrote.
In February, the IMF separately warned that Beijing’s state subsidies were producing inefficient firms, with total subsidies amounting to some 4% of GDP.

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