Egad!

However, in addition to rising debt, there is another, even more pressing risk: rising rates. According to Reuters, debt servicing costs - i.e., interest expense - now accounts for a fourth of state-owned firms’ revenues in the last few quarters. The ratio rose to around 27% in the second quarter - the highest in at least five years - before declining slightly to 24.47% in the third quarter due to a jump in revenues. Needless to say, with China's 10Y government bond yield  and corporate spreads blowing out to 3 year wides, traders will be especially focused on what happens to Chinese interest expense in the coming months.

Interest charges, they are quarter of the firms budget with a six percent variation.  This makes it very difficult to estimate prices of goods and production costs. Hence, evaluating these firms becomes fraught with hidden information about internal access to funds.