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Bad loan shuffle: How Chinese state companies make debts disappear

Deal involving Shandong-controlled entities highlights complexity of such maneuvers

Shandong International Trust is a non-bank financial company under the provincial government in Shandong, China.    © Getty Images

HONG KONG -- The chairman of China's Shandong International Trust was happy to talk about how the state-owned company weathered the tough economic climate of last year.

Speaking at SDITC's annual earnings briefing last week, Wan Zhong pointed to a 25% year-on-year increase in assets under management and a 27% surge in pretax profit to 591.23 million yuan ($86 million), among other bright spots.

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