A network of loan guarantees set up to improve companies’ access to credit in one of China’s richest districts is creating new risks of default as some debts sour.
The pattern suggests ways that privately owned operations are bearing the brunt of an economic slowdown.
Chinese media have reported on a credit crunch developing among steel and textile manufacturers in Hangzhou, south of Shanghai in Zhejiang Province, as the failure of some to repay loans pushes their burden onto healthier companies.
Hangzhou is part of the Yangtze River Delta, an engine of growth during China’s boom years but now the source of a third of nonperforming loans in the country.
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Gabriel Wildau, New York Times via CHINA US Focus http://ift.tt/1ix0cRN
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