Has China’s Deleveraging Campaign Achieved Anything?

In some corners of the market, there are murmurs that China’s corporate deleveraging campaign, which caused colossal investment losses and cost a few star traders’ careers, has not achieved much.

Skeptics have quite a few data points. Corporate borrowing is once again creeping up, hitting a near record 280% of the debt-to-GDP ratio. The sweeping financing package Beijing recently unveiled to aid battered real estate developers essentially rolls back a few key regulations that have been in place for the last two years. One can’t help asking if some of the regulators’ signature dishes — such as the “three red lines” — were too spicy.