(Yicai Global) Sept. 26 -- China's National Development and Reform Commission (NDRC) said it will work to deleverage and resolve potential debt risks.

The commission said on its website yesterday that it will focus on deleveraging state-owned enterprises, removing zombie companies to deleverage and cutting ineffective leverage.

Market-oriented debt-to-equity swaps must be strengthened so they can become a more comprehensive and effective corporate deleveraging tool that the country can use to promote the reform and restructuring of companies (especially state-owned enterprises), help groups realize equity diversification, and improve governance structure, the NDRC said. Corporate mergers and reorganizations require additional support, the commission said.

Market-oriented debt-to-equity swaps have gained traction, the NDRC said. Various organizations have signed market-oriented debt-to-equity swap framework agreements worth more than USD197 billion (CNY1.3 trillion) with 77 companies as of Sept. 22.