Chinese companies are facing a reality check after years of ramping up debt. A deleveraging campaign that President Xi Jinping began in 2016 to curb risks in the nation’s financial markets has cracked down on shadow banking and tightened rules on asset management. As a result, firms are having a tougher time raising new funds to repay existing debt, leading to a record number of bond defaults and government moves to try to alleviate the liquidity crunch, Bloomberg News reported. The worsening economic climate isn’t helping. The problem is big, with the potential to worsen.

After a tough start to the year for the corporate debt market, many managers of specialist investment vehicles backed by risky loans believe that March will be make or break. This has little to do with the financial health of the companies whose leveraged loans end up in these structures, known as collateralised loan obligations, the Financial Times reported. Instead, the CLO market is on tenterhooks because Japan’s largest agricultural bank is set to finalise its budget for the financial year beginning in April.

Pity the Chinese state-owned bank trying to obey ever-changing instructions from policymakers in Beijing. For years, banks preferred to lend to giant state-owned enterprises — both because of the implicit government guarantee that such debt has traditionally carried, and because SOEs were seen as national champions that deserved support. But now the script is shifting as China’s economy slows, the Financial Times reported.

Turkey’s government is making cheap credit a key part of its campaign trail, pushing banks to take on greater risks in an economy that’s already teetering on the brink of recession, Bloomberg News reported. President Recep Tayyip Erdogan’s administration is urging state-owned lenders to extend cheap loans to industries spanning agriculture to soccer clubs and help consumers pay off their credit cards or get below-market interest rates on mortgages.

Debt-ravaged Jet Airways India Ltd., the country’s biggest full-service airline, is selling a majority stake for 1 rupee -- a little more than 1 U.S. cent, Bloomberg News reported. It’s part of a bailout plan by its state-owned lenders that will give the airline time to arrange fresh equity. The complicated arrangement is on track to be voted through on Feb. 21, in what would represent the rescue of one of the country’s most visible companies at a sensitive time, with India’s general election just weeks away. It’s consistently been one of India’s top three airlines in the past decade.

India should kick-start private investment via policy measures or tax breaks if it does not want to stay stuck at a 7 percent growth rate, Uday Kotak, managing director and chief executive of Kotak Mahindra Bank Ltd, told CNBCTV18 in an interview, Reuters reported. “India has the fundamental capacity and we need to create a situation where the ground capacity will be growing at somewhere between 8 and 9 percent,” he said on the sidelines of an event organised by Kotak Mahindra Bank Ltd.

The Turkish owner of Godiva chocolates and McVitie’s biscuits has stepped off the acquisition trail. After years of global expansion, Yildiz Holding AS is speeding up asset sales to focus on its core business and underpin Turkey’s largest loan restructuring deal, which it struck with lenders last year, Bloomberg News reported. The Istanbul-based food producer plans to seek partners in units including Godiva’s business in Japan and some other Asian markets, while exiting non-core assets such as its mining and brick business.

ArcelorMittal SA, the world’s biggest steelmaker, has bid 48 billion rupees ($673 million) to acquire Essar’s 1200 megawatt power plant in central India, one of the most prized assets in the debt-ridden group’s power portfolio, Reuters reported. The bid for the power plant once again pits ArcelorMittal chief Lakshmi Mittal against the Ruia family, who are already fighting to prevent their flagship steel asset from falling into the hands of the global steel giant.

Another acquisitive Chinese company is wobbling. Less than five years old, China Minsheng Investment Group Corp. has spent more than $4 billion on investments and amassed $34 billion of debt, but recently almost failed to make a bond repayment, Bloomberg News reported. CMIG joins the likes of HNA Group Co. and Anbang Insurance Group Co. in struggling to repay debt after embarking on a spending spree.

Last year marked the deepest deterioration in Asian liquidity conditions since 2008. While it’s nowhere close to over, the worst of the squeeze may have passed, a Bloomberg View reported. The gears of the region’s asset markets could turn more smoothly in the second half of the year. The signals are faint, so they’re easy to miss. In India, shadow banks’ liquidity crunch is still dangerously close to becoming an insolvency crisis for property developers. In China, economists’ forecasts of large-scale monetary stimulus are yet to materialize.