diff --git a/.idea/compiler.xml b/.idea/compiler.xml
index d8fafdea9..1dab4bc59 100644
--- a/.idea/compiler.xml
+++ b/.idea/compiler.xml
@@ -53,8 +53,7 @@
         <module name="teavm-tooling" />
       </profile>
     </annotationProcessing>
-    <bytecodeTargetLevel>
-      <module name="impl" target="1.8" />
+    <bytecodeTargetLevel target="1.8">
       <module name="teavm" target="1.5" />
       <module name="teavm-chrome-rdp" target="1.8" />
       <module name="teavm-classlib" target="1.8" />
diff --git a/core/src/main/java/org/teavm/javascript/Renderer.java b/core/src/main/java/org/teavm/javascript/Renderer.java
index a97fb0524..6b76d2bfe 100644
--- a/core/src/main/java/org/teavm/javascript/Renderer.java
+++ b/core/src/main/java/org/teavm/javascript/Renderer.java
@@ -126,6 +126,7 @@ public class Renderer implements ExprVisitor, StatementVisitor, RenderingContext
     private final List<String> cachedVariableNames = new ArrayList<>();
     private boolean end;
     private int currentPart;
+    private List<PostponedFieldInitializer> postponedFieldInitializers = new ArrayList<>();
 
     private static class InjectorHolder {
         public final Injector injector;
@@ -227,6 +228,17 @@ public class Renderer implements ExprVisitor, StatementVisitor, RenderingContext
         }
     }
 
+    public void renderStringConstants() throws RenderingException {
+        try {
+            for (PostponedFieldInitializer initializer : postponedFieldInitializers) {
+                writer.appendStaticField(initializer.field).ws().append("=").ws()
+                        .append(constantToString(initializer.value)).append(";").softNewLine();
+            }
+        } catch (IOException e) {
+            throw new RenderingException("IO error", e);
+        }
+    }
+
     public void renderRuntime() throws RenderingException {
         try {
             renderRuntimeCls();
@@ -403,6 +415,11 @@ public class Renderer implements ExprVisitor, StatementVisitor, RenderingContext
                     value = getDefaultValue(field.getType());
                 }
                 FieldReference fieldRef = new FieldReference(cls.getName(), field.getName());
+                if (value instanceof String) {
+                    constantToString(value);
+                    postponedFieldInitializers.add(new PostponedFieldInitializer(fieldRef, (String) value));
+                    value = null;
+                }
                 writer.append("var ").appendStaticField(fieldRef).ws().append("=").ws()
                         .append(constantToString(value)).append(";").softNewLine();
             }
@@ -2391,4 +2408,14 @@ public class Renderer implements ExprVisitor, StatementVisitor, RenderingContext
     public <T> T getService(Class<T> type) {
         return services.getService(type);
     }
+
+    private static class PostponedFieldInitializer {
+        FieldReference field;
+        String value;
+
+        public PostponedFieldInitializer(FieldReference field, String value) {
+            this.field = field;
+            this.value = value;
+        }
+    }
 }
diff --git a/core/src/main/java/org/teavm/vm/TeaVM.java b/core/src/main/java/org/teavm/vm/TeaVM.java
index e2c2f4dfb..7c74df104 100644
--- a/core/src/main/java/org/teavm/vm/TeaVM.java
+++ b/core/src/main/java/org/teavm/vm/TeaVM.java
@@ -513,6 +513,7 @@ public class TeaVM implements TeaVMHost, ServiceRepository {
             renderer.renderRuntime();
             renderer.render(clsNodes);
             renderer.renderStringPool();
+            renderer.renderStringConstants();
             for (Map.Entry<String, TeaVMEntryPoint> entry : entryPoints.entrySet()) {
                 sourceWriter.append("var ").append(entry.getKey()).ws().append("=").ws();
                 MethodReference ref = entry.getValue().reference;
diff --git a/tests/src/test/java/org/teavm/classlib/java/lang/VMTest.java b/tests/src/test/java/org/teavm/classlib/java/lang/VMTest.java
index c85382ad3..98abb6aad 100644
--- a/tests/src/test/java/org/teavm/classlib/java/lang/VMTest.java
+++ b/tests/src/test/java/org/teavm/classlib/java/lang/VMTest.java
@@ -21,10 +21,6 @@ import org.junit.Test;
 import org.junit.runner.RunWith;
 import org.teavm.junit.TeaVMTestRunner;
 
-/**
- *
- * @author Alexey Andreev
- */
 @RunWith(TeaVMTestRunner.class)
 public class VMTest {
     @Test
@@ -115,6 +111,24 @@ public class VMTest {
       assertNotNull(obj.getValue());
     }
 
+    // See https://github.com/konsoletyper/teavm/issues/196
+    @Test
+    public void stringConstantsInitializedProperly() {
+        assertEquals("FIRST ", ClassWithStaticField.foo(true));
+        assertEquals("SECOND ", ClassWithStaticField.foo(false));
+    }
+
+    private static class ClassWithStaticField {
+        public final static String CONST1 = "FIRST";
+        public final static String CONST2 = "SECOND";
+
+        public static String foo(boolean value) {
+            StringBuilder sb = new StringBuilder();
+            sb.append(value ? CONST1 : CONST2).append(" ");
+            return sb.toString();
+        }
+    }
+
     static class SuperClass {
         static final Integer ONE = new Integer(1);