In the imprecise science of divining China’s banking health, the fine print is sometimes worth a closer look than the final statistic. This week, the McKinsey Global Institute published a new estimate of China’s nonperforming loan ratio, measuring it at 7% as of last year. The indicator shows bad debt as a percentage of the total loan book, and is the most basic brush stroke in an analysis of China’s economic state. McKinsey ventured that this portion could rise to 15% in 2019 if China fails to change its investment-heavy approach to economic development.

Chinese officials hit back at critics of the country’s mounting debt pile on Thursday, saying the country’s banks had taken measures to ensure non-performing loans would not pose a systemic risk to China’s financial system, the Financial Times reported. “China’s banking sector is generally stable and risks are under control,” Wang Shengbang, a senior official with the country’s banking regulator, said at a briefing.

China is renegotiating billions of dollars of loans to Venezuela and has met with the country’s political opposition, marking a shift in its approach to a nation it once viewed as a US counterweight in the Americas. Venezuela is facing one of the worst crises of its 200-year history, with a collapsing economy and political deadlock stoked by the oil price slump. China, which is Caracas’s biggest creditor and has loaned the country $65bn since 2005, has already extended the repayment schedules for debts backed by oil sales.

Whether crisis-ridden Venezuela will default is a question increasingly on the minds of bond traders. It’s now also one that is getting front-page treatment from China, one of the Latin American country’s biggest financial backers, Bloomberg News reported. On June 11, the People’s Daily -- the mouthpiece paper of China’s Communist Party -- published an article in its overseas edition with the headline “Will Venezuela Default?” After considering its willingness and ability to pay, the author concludes the answer is no and chalks up all the talk about default to media speculation.

China's Bohai Steel Group said it had paid the coupon on its yuan-denominated bonds, which was due on Wednesday, and gave assurance that it had sufficient funds to pay the coupon on dollar bonds due for payment on June 17. The 6.4 percent coupon is on its 1.5 billion yuan bond . China's steelmakers are in the eye of a storm as Beijing moves to slim down bloated industries, including steel and coal, to make the economy more efficient and address a supply glut that has hammered coal and steel prices.

The International Monetary Fund has issued its sternest warning to date on the risk from China’s rising debt burden, urged more aggressive action to curb credit growth and subject state-owned enterprises to the discipline of the market, the Financial Times reported. IMF deputy managing director David Lipton presented the fund’s annual assessment of China’s economy on Tuesday in Beijing, days after a speech in Shenzhen warning of possible risk spillovers to the broader global economy. “Corporate debt, though still manageable, is high and rising fast.

China Vanke, the mainland's biggest property company by sales, said it will submit details of a proposed $9.3 billion restructuring involving subway operator Shenzhen Metro Group to the stock exhange this week, and expects to resume trading by early July, Reuters reported. Vanke's shares were suspended on the Shenzhen Stock Exchange in December and it announced the deal with Shenzhen Metro in March as its management fought to retain control of the company in a battle with its major shareholder, financial conglomerate Baoneng.

China’s corporate debt risks sparking a bigger crisis if the authorities fail to tackle it, the International Monetary Fund has warned, the Financial Times reported. It is the latest red flag over China’s ballooning debt, which rose to a record 237 per cent of gross domestic product in the first quarter on the back of massive lending designed to boost economic growth. That has put the subject to the fore of this year’s annual IMF review of the Chinese economy with a team from the Fund set to conclude its latest monitoring mission on Tuesday.

While China’s state-owned banks plot debt-for-equity swaps to cut bad loans, one struggling peer-to-peer lender has brewed up a more novel plan: repaying its investors in baijiu, the popular Chinese liquor, the Financial Times reported. Chinatou.com said last week that it was no longer able to return cash to investors following the arrest of its chairman. Instead, it pledged to pay them in baijiu produced by a connected company “to minimise the loss to investors”.

Consumer inflation in China eased in May for the first time in seven months as food prices fell, giving policy makers more room to ease monetary policy, The Wall Street Journal reported. The consumer-price index rose 2.0% in May from a year earlier, compared with a 2.3% increase in April, the National Bureau of Statistics said Thursday. The rise in the key inflation gauge undershot a median 2.2% gain economists had expected. “This gives China a lot more space to keep policy settings pretty loose,” said IG Markets analyst Angus Nicholson.