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China's mountain of bad debt climbs 10% in 6 months

Smaller banks buckle under weight of poor loans amid economic slowdown

Nearly 5% of all lending in China stands in default, or close to it.   © Reuters

HONG KONG -- Nonperforming loans in China grew 10% during the first half of 2019 to 2.24 trillion yuan ($313 billion), with more small and midtier companies failing to keep up with their debts.

Almost 5% of all lending in China is in default or close to it, once the 3.63 trillion yuan of subperforming loans -- typically referring to overdue loans that are not in default -- are included as well. The burden weighs especially on smaller banks that lack the same troves of cash as their state-backed compatriots.

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