Two key gauges of Chinese factory output in July showed conflicting results, with one that focuses on larger state-owned companies flagging and the other, on smaller private companies, soaring, The Wall Street Journal reported. The National Bureau of Statistics said Monday that the official manufacturing purchasing managers’ index dipped into negative territory for the first time in five months, to 49.9 last month from 50.0 in June. It fell short of many economists’ expectations.

China’s foreign exchange regulators are struggling to stem the flow of personal wealth spilling offshore via Hong Kong’s insurance industry, the latest results from the world’s second-largest insurer suggest, the Financial Times reported. On Thursday AIA Group said that the value of new business in the territory increased by 60 per cent to $537m in the first six months of the year, noting a “substantial uplift in new business from mainland Chinese customers”.

A series of bond defaults in north-east China is exposing creditors’ frustration at the lack of a transparent process for resolving bad debt as cash-strapped local governments step back increasingly from taxpayer bailouts, the Financial Times reported. President Xi Jinping’s push for “supply-side reform” is centred on cutting excess capacity and paring back credit to so-called zombie companies, many of them state-owned. That is setting up conflicts between creditors and local governments that rely on state factories for employment and tax revenue.

A very local problem in China is being exported at an alarming rate, according to a Bloomberg commentary yesterday. Debt from special-purpose vehicles linked to municipal and provincial governments -- leverage that central authorities are trying to extinguish -- is becoming more common in overseas markets. What's worse, lately it's been the weakest cities and provinces panhandling to international investors, according to the commentary.

China is weighing how to consolidate financial regulation, following missteps that exacerbated market turmoil and embarrassed Beijing. One option under consideration would empower the central bank, as other countries have done in times of risk, The Wall Street Journal reported. The government has a number of tools for reining in its often freewheeling markets and managing its economy, and it hasn’t shied from using them. But its credibility has been hurt by violent swings in the stock market and unexpected devaluations of the currency over the past year.

The home to about 3 million people in the northeast rust-belt province of Liaoning is ground zero in China’s slowdown -- the worst-performing city in the worst-performing province, Bloomberg News reported.. Ads offering work visas abroad are peppered across hoardings, and billboards offer loans for people in "urgent need." Shuttered car-parts factories flank the highway to the high-speed train station. In the center, a closed wedding-photograph studio has a notice in the window that reads: "Owner is going overseas.

Soft Chinese inflation and G20 concerns that the global recovery remains grim are hardening views among some economists that more government stimulus will be needed to support China, the world's second-biggest economy, the Irish Times reported. Consumer inflation last month remained under the official target of around 3 percent for this year, data released on Sunday showed, indicating persistently weak domestic demand. The consumer price index (CPI) rose 1.9 percent in June from a year earlier, compared with a 2.0 percent increase in May, China's National Bureau of Statistics said.

The Chinese government's call to the nation to build an innovation-driven economy from the top down has sparked a rush by local governments to construct new buildings in the name of supporting creativity, the International New York Times reported on a Reuters story. Innovation centres have been popping up around the country and are set to more than double to nearly 5,000 in the next five years, according to internet research firm iiMedia. The only problem for local governments; entrepreneurs are not moving in.

Some $1.3tn in Chinese corporate loans — equivalent to the size of the entire Australian economy — is “at risk” of turning bad, according to the International Monetary Fund. But you would never guess that anything was even slightly amiss in corporate China if you were to consult the country’s homegrown credit rating agencies, the Financial Times reported. Everything is just fine, say the top-10 Chinese credit rating agencies.

China's Baosteel Group and Wuhan Iron and Steel Group, two of the country's largest steelmakers, are together planning to restructure, their listed units said in separate stock exchange filings on Sunday, Reuters reported. Baosteel Group is China's second-largest steelmaker, and Wuhan Iron and Steel Group is the country's fourth-largest. The companies did not specify what the restructuring would entail. Beijing has said that mergers would be a key way to consolidate the steel sector, aiming to cut overcapacity and increase the proportion of output from China's ten biggest mills.