Bankruptcies of Chinese businesses have surged in the past two years, in a sign the state is beginning to take painful steps to trim the bloated industrial sector as it tries to rein in debt, The Wall Street Journal reported. China’s search for ways to manage its slowest growth in a quarter-century hangs over the annual National People’s Congress, which starts on Sunday. The challenge is expected to drive discussions among delegates on how to unwind the heavily indebted companies that account for much of the industry and jobs in their home regions.

Prime Minister Narendra Modi has reason to be wary of ambitious reforms to India’s economy, given the fraught rollout of his plan to ban 500- and 1,000-rupee notes overnight, a Bloomberg View reported. For his country to reach its true economic potential, however, he will need to do something about India’s ailing state banks. These institutions, which account for more than 70 percent of lending in India, are in no immediate danger of collapse. But they’ve become a huge drag on the economy.

Tata Steel Ltd is still in talks with Germany's ThyssenKrupp AG about a potential merger of their European steel assets, the Indian company said on Monday. The statement was in response to reports in the British media on Sunday that India's largest steel company might be in the process of calling off a potential deal with the Germans, the International New York Times reported on a Reuters story. The company is in "constructive discussions" with ThyssenKrupp, said Tata Steel.

China’s banking system has surpassed that of the eurozone to become the world’s largest by assets, a sign both of the country’s increased influence in world finance and its reliance on debt to drive growth since the global financial crisis, the Financial Times reported. While China’s gross domestic product surpassed the EU’s economic bloc in 2011 at market exchange rates, its banking system did not take over the top spot until the end of 2016, Financial Times analysis shows.

If you owe a bank a hundred dollars, it is your problem. If you owe a hundred million, it is the bank’s problem. If you are one of many tycoons borrowing billions to finance dud firms, it is the government’s problem, The Economist reported. That is roughly the situation India finds itself in today. Its state-owned banks extended credit to companies that are now unable to repay. Like the firms they have injudiciously lent to, many banks are barely solvent. Almost 17% of all loans are estimated to be non-performing; state-controlled banks are trading at a steep discount to book value.

China’s central bank faces a dilemma: Whether to raise borrowing costs and potentially undermine the nascent economic recovery, or hold firm and risk spurring capital outflows as Federal Reserve policy tightening cuts into the country’s interest-rate advantage. The People’s Bank of China is trying to take the middle road, boosting money-market rates as a way of containing company leverage, while allowing bank borrowing to largely continue unchecked, Bloomberg News reported.

A surge in bankruptcy cases in Chinese courts last year is welcome progress, the Financial Times reported. The lack of creative destruction in China has been a perennial problem, exacerbating industrial overcapacity and piling mountains of bad loans on to the banking system. But the cull of zombie companies, while positive, still falls a long way short of the thorough restructuring that China’s economy needs. The zombie hunt did not aim at the big, lossmaking state-owned enterprises.

Indian stressed-asset deals will increase this year as bad loans rise and reforms pushed by Prime Minister Narendra Modi’s government start to bear fruit, according to the nation’s top investment banker, Bloomberg News reported. Interest will come from both strategic buyers and private equity firms, said Vishal Kampani, managing director of JM Financial Ltd., the former joint venture partner of Morgan Stanley in India. JM Financial was the No.

Bankruptcy cases surged in China last year, indicating growing economic stress as well as progress in the ruling Communist party’s efforts to use the country’s courts to deal with indebted “zombie” companies and reduce industrial overcapacity, the Financial Times reported. Chinese courts accepted 5,665 bankruptcy cases in 2016, an increase of 54 per cent from the year before, the country’s top court said on Friday. About 3,600 of those cases were resolved, with 85 per cent of the resolved cases resulting in liquidation.

Average wages in China’s manufacturing sector have soared above those in countries such as Brazil and Mexico and are fast catching up with Greece and Portugal after a decade of breakneck growth that has seen Chinese pay packets treble, the Financial Times reported. Across China’s labour force as a whole, hourly incomes now exceed those in every major Latin American state apart from Chile, and are at around 70 per cent of the level in weaker eurozone countries, according to data from Euromonitor International, a research group.