Finance firms that help keep cash flowing to China’s towns, cities and provinces face rising risks of landmark bond defaults just as they turn to global markets for funds, Bloomberg News reported. China’s economic slowdown is weighing on revenue at regional governments, hampering their ability to support the 5.3 trillion yuan ($789 billion) of outstanding onshore notes from local-government financing vehicles, which have yet to suffer nonpayments. Such issuance fell 18 percent last quarter as regulators curbed sales, forcing some to seek funds overseas.

Dongbei Special Steel Group Co Ltd has formally entered into a bankruptcy restructuring process following a court filing by one of its creditors, official news agency Xinhua reported on Monday. Dongbei, owned by the Liaoning provincial government in the country's "rustbelt" northeast, has been at the heart of troubles in China's debt market this year, defaulting on nine separate bonds even as Beijing has vowed to crack down on "zombie" firms with perennial losses and too much debt.

Fushun Special Steel said on Friday a court is reviewing an application from creditors for a bankruptcy restructuring of parent Dongbei Special Steel Group Co Ltd., Reuters reported. Fushun Special Steel said in a statement on the Shanghai stock exchange website that its own operations and capital flows were normal. State-owned steelmaker Dongbei Special Steel, an unlisted company, owns 35.22 percent of Fushun.

China is struggling with a string of rust-belt corruption cases that reflect the government’s troubles delivering on one of its signature policies: reducing the bloat in major industries that are dragging down the economy, the Wall Street Journal reported today. In the latest case, made public by official media this week, prosecutors accused a midlevel official of siphoning at least $6.3 million in government funds meant to help laid-off workers.

Sainty Marine Corp., a shipbuilder based in the eastern Chinese city of Nanjing, plans to convert its capital into about 520 million new shares and swap some or all of them with debt as part of a revamp, Bloomberg News reported today. Creditors will get one equity share for about 13.72 yuan ($2.1) of Sainty’s debt under the restructuring, the company said in a draft plan to the Shenzhen stock exchange. Sainty Marine had more than 800 million yuan ($120 million) of loans overdue when trading in its shares was halted about a year ago.

Chinese regulators have pushed through the debt restructuring plan of a state-owned steel trader as the government gets set for a new round of debt cleanups, Bloomberg News reported today. Sinosteel Engineering & Technology Co. yesterday received a notice from its controlling holder Sinosteel Corp. that its parent’s plan had been approved with guidance from government agencies, according to a statement from the unit to the Shenzhen stock exchange. Beijing-based Sinosteel Corp.

While economists and many foreign investors fret about China’s spiralling debt and rising defaults, a small niche of alternative asset managers is braving the China credit space, attracted by high yields from borrowers shut out from other sources of finance, the Financial Times reported. Global banks have pulled back on cross-border lending to China, but some private debt funds are moving in to plug gaps in a domestic financial system still dominated by state-owned banks.

China’s economy is showing signs of stability, a welcome break for both investors and a leadership that has spent much of 2016 battling economic headwinds. But it is an engineered calm that comes at a cost, say economists, The Wall Street Journal reported. Over the past month, gauges such as industrial production and fixed-asset investment were surprisingly robust. Imports rose for the first time in nearly two years and strong property sales in large cities helped prop up demand for steel and cement. “The data is ticking along,” said Chris Weston, chief strategist at IG Markets Ltd.

The explosive growth of spending overseas by Chinese tourists dwarfs the increase in the number of Chinese traveling abroad. The most likely reason? Disguised capital outflows, Bloomberg News reported. So says former U.S. Treasury official Brad Setser, who drilled into the spending data provided by some of the most popular destinations for Chinese travelers.

According to the Chinese business publication Caixin, the first of China's massive state-owned organizations has collapsed under the weight of $2.2 billion worth of bad debt in China's interbank bond market. The company, Guangxi Nonferrous Metals Group, filed for bankruptcy nine months ago but only got approval from the Chinese government to go bankrupt a few days ago. This is different from other Chinese bankruptcies. It's the first company in China's superliquid, over-the-counter interbank market to go bust.