Chinese leaders pushed for an unusually speedy resolution for Zhongzhi Enterprise Group Co. after the shadow banking giant collapsed, underscoring the government’s increased focus on containing financial risks as the economy struggles, Bloomberg News reported.

Chinese regulators have closed a regulatory loophole that last year allowed heavily indebted local government financing vehicles (LGFVs) to further increase their borrowing, four sources familiar with the matter told Reuters. LGFVs, set up by Chinese local governments to fund infrastructure investment, have been told to stop issuing offshore bonds with a 364-day duration, the sources said.

A top executive at China Evergrande's electric-vehicle business has been detained as part of a criminal investigation, adding to Evergrande’s mounting problems, the Wall Street Journal reported. China Evergrande New Energy Vehicle said on Monday that Liu Yongzhuo, an executive director and the president of its automobile business, was being held by authorities “on suspicion of illegal crimes.” It didn’t provide details or say when he was detained. Liu attended a company event in the northern Chinese port city of Tianjin on Dec.

China's State Council issued guidelines on improving an operating budget system for state-owned capital, according to a statement on the government website on Saturday, Reuters reported. The government will expand coverage of the budget system and optimise a mechanism for state-owned companies to hand over their profits, among a series of measures seeking to improve the capital efficiency and support growth of state-owned assets, it said. Read more.

The National Company Law Tribunal (NCLT) has admitted Canara Bank's application to initiate the corporate insolvency resolution process (CIRP) against Mumbai-based real estate developer Shah Group Builders, the Economic Times of India reported. The bank had moved the bankruptcy court against the developer in 2020 following its default on loans worth nearly ₹100 crore including interest thereon. The account was declared a non-performing (NPA) in December 2016.

China's local government financing vehicles (LGFVs) are repaying their bonds early at the fastest pace since 2018, taking advantage of a Beijing-backed debt swap programme aimed at slashing localities' borrowing costs, Reuters reported. The redemptions have jumped since October, when Beijing allowed local governments to issue special refinancing bonds, estimated to be worth over 1 trillion yuan ($139.85 billion), which could replace their higher-yielding LGFV debt.

South Korea's government will put its focus on supporting people's livelihoods and managing risk factors, as it cut the country's 2024 GDP forecast and raised its inflation projection, Reuters reported. In its biannual economic policy plan released on Thursday, the finance ministry expected the economy to grow 2.2% in 2024, down from 2.4% seen in July, after expanding 1.4% in 2023 which was a three-year low. The ministry expected consumer prices to rise 2.6% this year, up from its previous forecast of 2.3%. In 2023, prices rose 3.6%.

Japan's factory activity contracted at the steepest pace in 10 months in December as output and new orders slid on market uncertainty, a private-sector survey showed on Thursday, Reuters reported. The final au Jibun Bank Japan manufacturing purchasing managers' index (PMI) shrank to 47.9 in December from 48.3 in November. It was the weakest reading since the index hit 47.7 in February and stayed below the 50.0 threshold that separates growth from contraction for a seventh straight month.

Some of China's top banks have sharpened scrutiny of smaller peers' asset quality and have tightened standards for interbank lending, three sources said, in an effort to curb credit risk as a deepening property debt crisis ripples through the economy, Reuters reported. Two of China's biggest state-owned banks and a leading joint-stock bank have stepped up reviews of smaller lenders over the past couple of months to identify those with poor asset quality and have a high risk of default, the sources said.