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Shuli Ren

Has China’s Deleveraging Campaign Achieved Anything?

After four years, efforts to curb excessive borrowing have had some success, but work still needs to be done.

Dealing with the debt pile.

Dealing with the debt pile.

Photographer: Qilai Shen/Bloomberg

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.