Debt-to-equity swap programs to lower China's corporate debt will not offer a free lunch to profit-losing companies, according to guidelines issued by the State Council on Monday.

Unlike the previous government-led equity-for-debt program launched at the end of the 1990s, the new guidelines require that the program will be launched under market principles.

The government will play a complementary role only, the guidelines said. It will not be responsible for choosing which companies are qualified for the program and won't bear the losses during the swap process.