China Huishan Dairy Holdings Co Ltd, struggling under billions of dollars worth of debt, is preparing for provisional liquidation in a legal escalation of one of the most spectacular collapses of a Hong Kong-listed firm in recent years, the International New York Times reported on a Reuters story. Shares in the mainland group, once a hot property with investors, have been suspended since they plunged 85 percent without warning in March, after which it revealed missed loan payments and the disappearance of its finance director.

China’s central bank injected $47bn into its financial system on Thursday, its largest intervention in nearly a year, in an effort to calm investor fears that Beijing’s crackdown on debt-fuelled growth would put a break on the country’s rapid expansion, the Financial Times reported.

China Huishan Dairy Holdings Co., the Hong Kong-listed dairy company targeted by short sellers including Muddy Waters Capital LLC, said on Thursday that it is preparing for provisional liquidation, Bloomberg News reported. The firm had told its Cayman legal advisers to make the preparations, it said in a Hong Kong stock exchange filing. Huishan’s board earlier found that the net liabilities of its units in China “could have been” 10.5 billion yuan ($1.58 billion) as of March 31, the company said.

China has chosen 31 more government-owned firms to participate in its third round of mixed ownership reforms aimed at injecting private capital into the state sector, an official of the country's powerful economic planning body said on Wednesday. The mixed ownership reform plan is designed to inject market discipline into, as well as open up additional financing for, China's lumbering, debt-ridden state sector, the International New York Times reported on a Reuters story.

What happens when you say you’ve taken away a safety net, but nobody believes you? That’s essentially what’s going on in one corner of China’s bond market, with the implication being that someone needs to get hurt before the message hits home. The issue relates to local government financing vehicles, or LGFVs, which boomed a decade ago when China’s Communist leadership let provincial and municipal authorities ramp up borrowing to fund all sorts of infrastructure and property development, Bloomberg News reported.

China’s financial system is getting significantly more vulnerable due to high leverage, according to central bank governor Zhou Xiaochuan, who also flagged the need for deeper reforms in the world’s second-biggest economy, Bloomberg News reported. Latent risks are accumulating, including some that are "hidden, complex, sudden, contagious and hazardous," even as the overall health of the financial system remains good, Zhou wrote in a lengthy article published on the People’s Bank of China’s website late Saturday.

After years of propping up lossmaking state companies with fiscal subsidies and cheap credit, one Chinese province has embraced privatisation to cast off its burden, setting a precedent for dealing with thousands of “zombie enterprises,” the Financial Times reported.  Dongbei Special Steel, based in the north-east rust-belt province of Liaoning, is a high-profile example of the excessive debt and poor profitability that has plagued thousands of lossmaking state groups.

It used to be that when America sneezed, the world caught a cold. This time around, it’s the risk of a sickly China that poses a bigger threat. The world’s second-largest economy is now trying to ward off the sniffles. While output is still growing at a pace that sees gross domestic product double every decade, the problem remains that much of that has been fueled by a massive buildup of credit, Bloomberg News reported.

China is returning to international bond markets for the first time in 13 years, with a $2 billion offering of U.S. dollar bonds that will allow the world’s second-largest economy to flex its financial muscle in the wake of its just completed Communist Party Congress. Bankers have begun marketing China’s five- and 10-year bonds to investors, primarily in Asia and Europe, and the securities are expected to price on Thursday, The Wall Street Journal reported.

China has taken “baby steps” toward cutting leverage as lending from banks slows, but progress has been uneven as borrowing by households and the government has risen, according to S&P Global Ratings. Authorities are adopting both tight and loose policies to try to reduce the country’s dependency on debt without causing a hard landing, analysts led by Christopher Lee wrote in a note dated Oct. 16. S&P last month cut China’s sovereign rating for the first time since 1999, saying it didn’t believe enough was being done to contain credit growth, Bloomberg News reported.