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A construction project in Beijing's Tongzhou district in May 2017   © Reuters
The Big Story

The hidden risks of China's war on debt

Lending clampdown sparks fears of an economic chilling effect

HENNY SENDER, Nikkei Asian Review columnist | China

HONG KONG -- When the Bank of Jinzhou, based in China's northeastern rust belt, went public on the Hong Kong stock exchange two years ago, its finances were a wreck. It had issued 34 billion yuan ($5.36 billion) worth of "wealth management products" that are hallmarks of China's sprawling "shadow" banking sector, and it was owed 9 billion yuan by an unnamed borrower who was under investigation by Hong Kong regulators. The bank, like many others across China, was loaded with risky debt -- the kind that China's leadership in Beijing is now determined to stamp out.

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