A mini debt crisis in northern China is exposing cracks in a financial pillar of the country’s economic revival plan: the $430 billion loan-guarantee industry. China has a heavy corporate debt burden and its economy is slowing, putting borrowers under strain, but many lenders take comfort from the fact that their loans are insured against default through the nation’s almost 8,000 guarantee companies. A third of these are state-backed companies that stand behind more than 60 percent of China’s guaranteed loans. They exist to facilitate finance for smaller businesses – China’s job-creators – but a crisis unfolding in northern Hebei province shows that their ability to meet those guarantees is in doubt. In Hebei, a gritty […]