Chinese officials said two months ago they will make it easier for commercial banks to swap problem loans in overindebted companies for stock, in a maneuver known as a debt-for-equity swap.

The plan may allow conversions of up to $155 billion of bad loans, Bloomberg reported, which could help prevent struggling firms from default.

This plan could, depending on who you talk to, simply move debt from one party to another, or alternatively incentivize the wrong kind of behavior. 

Gordon Orr, a senior adviser to McKinsey who sits on the board of Lenovo and Swire Pacific, wrote in a blog post Friday that China's army of investors have the most to lose from this debt fix.

Here is Orr on the issue (emphasis ours):