(Corrects paragraphs 11-12 to remove comments erroneously attributed to the executive of Jinxi Axle Co; in paragraph 11, clarifies the basis of calculation of debt ratio and that it nearly, but did not fully, tripled between 2010 and 2014.)

* China's corporate debt 160 pct of GDP, twice U.S. level

* Estimated to climb 77 pct to $28.8 tln over five years

* Increased bank lending not going to most profitable areas

* Manufacturers' loan to core profit ratio rising sharply

* Loan quality, pricing compromised by 'open credit taps'

By Umesh Desai

HONG KONG, July 19 (Reuters) - Beijing may have averted a crisis in its stock markets with heavy-handed intervention, but the world's biggest corporate debt pile - $16.1 trillion and rising - is a much greater threat to its slowing economy and will not be so easily managed.

Corporate China's debts, at 160 percent of GDP, are twice that of the United States, having sharply deteriorated in the past five years, a Thomson Reuters study of over 1,400 companies shows.

And the debt mountain is set to climb 77 percent to $28.8 trillion over the next five years, credit rating agency Standard & Poor's estimates.

Beijing's policy interventions affecting corporate credit have so far been mostly designed to address a different goal - supporting economic growth, which is set to fall to a 25-year low this year.

It has cut interest rates four times since November, reduced the level of reserves banks must hold and removed limits on how much of their deposits they can lend.

Though it wants more of that credit going to smaller companies and innovative areas of the economy, such measures are blunt instruments.

"When the credit taps are opened, risks rise that the money is going to 'problematic' companies or entities," said Louis Kuijs, RBS chief economist for Greater China.

China's banks made 1.28 trillion yuan ($206 billion) in new loans in June, well up on May's 900.8 billion yuan.

The effect of policy easing has been to reduce short-term interest costs, so lending for stock speculation has boomed, but there is little evidence loans are being used for profitable investment in the real economy, where long-term borrowing costs remain high, and banks are reluctant to take risks.

Manufacturers' debts are increasingly dwarfing their profits. The Thomson Reuters study found that in 2010, materials companies' debts were 2.8 times their core profit. At end-2014 they were 5.3 times. For energy companies, indebtedness has risen from 1.1 to 4.4 times core profit. For industrials, from 2.5 to 4.2.

LOW RETURNS

Gao Hong, investor relations principal at railway equipment maker Jinxi Axle Co, said that financial investments had helped compensate for difficult conditions in its core business as it continued to search for viable opportunities. The company has seen the ratio of its overall debt to core earnings (earnings before interest, taxes, depreciation and amortization) nearly triple to 10.25 between 2010 and 2014.