This year, more than 700 Chinese firms, or about 20 per cent of actively traded stocks, have announced plans to spend money on their own shares.
The 24 billion yuan (US$3.5 billion) shelled out so far is just shy of the past three years combined.
In China, major shareholders routinely use their stocks as collateral to secure short-term bank financing. These loans are more common among privately controlled enterprises, which have weak access to bank credit.
In the first half, 22 per cent of listed companies pledged at least 30 per cent of their shares, a 6 percentage point increase from two years earlier.
In the second half, a staggering 1 trillion yuan of share-pledged loanswill be due. A similar amount of corporate bonds will need to be refinanced, forcing these companies to compete for funding.
Source: SCMP
https://www.scmp.com/business/banking-f ... en-chinese