Handing out little red envelopes containing “lucky money” is part of the Chinese New Year tradition. Known as hongbao in Mandarin and lai see in Cantonese, this expression of good fortune is deeply rooted in the Spring Festival holiday.

But for state-owned enterprises in China, there will be no hongbao or lai see packets this year after the country’s central bank, the People’s Bank of China reiterated its “prudent and neutral” monetary policy for 2018.

At the top of the priority list will be the on-going battle to rein in debt at SOEs, which has been brought into sharp focus during the past few years.

“The overall level of leverage is still high, especially the debt pressure on state-owned enterprises, [which] is still large,” the People’s Bank of China stated in its fourth-quarter monetary policy implementation report earlier this week.

Getting to grips with the problem is proving a massive challenge.

The country’s total debt of $30 trillion is roughly 259% of GDP, according to Bloomberg Economics, and has been fueled primarily by massive borrowing by state companies. The IMF estimate is slightly lower at 230% of GDP.

Still, by 2022 the credit buildup is projected to hit 327%, Bloomberg Economics has forecasted. “The root cause is the top-down, command-based economy,” said Junheng Li, the founder of JL Warren Capital, a China-focused research company in New York.

“Local governments in each province are given targets by the central government and each province then gives targets to counties, counties to municipalities, municipalities to strategic state-owned enterprises.”

In a bid to smash the circle, and turn off the cash drip at “zombie” companies, Beijing has forced through a series of mergers, “shotgun marriages” and closures to prune bloated state-owned industries.

Unwieldy SOEs in the steel, iron ore processing and coal mining sectors have been singled out in a move to make them more competitive while weaning them off state subsidiaries.

Even multi-billion contracts from the Belt and Road Initiative, a trillion-dollar program of ‘New Silk Road’ superhighways, connecting the country with Asia, Africa, the Middle East and Europe, are being closely scrutinized.

But then, this is not just an SOE issue. Other areas of concern include stiffening regulations on “shadow banking” activity and tightening real estate financing.

“We will fight a tough battle against major financial risks and safeguard the bottom line of systemic financial risks,” the People’s Bank of China pledged in its statement.

During the past three years, President Xi Jinping has led a personal crusade against “corruption” and, what many China watchers believe, is a tolerance for fudged data.

At the heart of the problem is “debt,” which could trigger “systemic financial risks,” Zhou Xiaochuan, the long-serving governor of the People’s Bank of China, warned last month.

“The PBOC may delicately manage interbank liquidity to avoid spikes in interbank rates against a backdrop of tighter liquidity conditions due to financial deleveraging and expected rate hikes by the US Federal Reserve,” Zhao Yang, the chief economist in China with Nomura Securities, told the state-owned China Daily.

In short, the little, red envelopes are safely locked away in the vaults of  the People’s Bank of China until next year.