Massive overcapacity in China's steel industry is not yet falling, a vice minister said on Monday, as the country's leading steel companies conceded that current output was unsustainable and blamed the restart of mills previously shut, the International New York Times reported. China is facing anger and calls for trade penalties to block its exports by global rivals, who say it is dumping cheap exports after a slowdown in demand at home.

Implicit guarantees are ubiquitous in China, but one company went a step further when it appealed to the central bank to give an explicit reassurance to creditors that the government will not permit any default, the Financial Times reported. China City Construction Holding Group Co saw yields on its Hong Kong-traded “dim sum” bonds spike recently after a surprise privatisation, highlighting the ways moral hazard distorts capital allocation in the world’s largest economy.

China’s run of disappointing April data underscore the bind facing policy makers seeking to cut capacity from the worst-performing sectors and curb credit excesses in recovering ones without stalling the economy. Bloomberg’s monthly gross domestic product tracker shows growth slowed to 6.88 percent in April, from 7.11 percent in March. Weak steel and coal output dragged on industrial production, which increased 6 percent from a year earlier versus economists’ forecasts of 6.5 percent, while retail and investment readings also disappointed, according to reports released on Saturday.

Ao maybe George Soros was on to something after all, the Financial Times reported in an insight. On Monday the People’s Daily, the Chinese Communist party’s flagship newspaper, published a front-page interview with an “authoritative figure” who warned that the country’s soaring debt levels could lead to “systemic financial risks”. The last time the People’s Daily made such a splash was in January, when its overseas edition took Mr Soros to task for allegedly shorting the renminbi.

China is awash in a credit stimulus that is bigger as a proportion of GDP than the one that Beijing unleashed to haul the economy out of trouble in the aftermath of the 2008/2009 financial crisis. But this time around, the deluge is failing to boost growth in an economy already saturated with liquidity, a new statistical study shows, the Financial Times reported.

China Minmetals Corp, the country's biggest metals trader, is raising 15 billion yuan ($2.3 billion) from investors to help restructure and list its financial assets, according to a fundraising document seen by Reuters. Minmetals-controlled Kingray New Materials Science & Technology, a loss-making electrical components maker, is seeking to issue shares to a Minmetals Corp subsidiary, China Minmetals Corp Ltd, to acquire all of Minmetals Capital Holdings, which owns the metals trader's financial assets, the document shows.

Capital flows from China persisted in April despite a reported rise in foreign exchange reserves, which mainly reflected the impact of a weaker dollar on the central bank’s euro and yen holdings, the Financial Times reported. After falling for 18 of 20 months until February, slicing $791bn off the headline total, China’s official reserves rose by a combined $17bn in March and April, hitting $3.22tn last month. But a look inside the data suggests significant latent outflow pressure remains. China has also benefited from global tailwinds in recent months that may not last.

A fertiliser producer in north China will default on bond payments on Thursday, the latest casualty of a slowing economy and rampant overcapacity in commodity sectors including basic chemicals, the Financial Times reported. Defaults have contributed to falling Chinese bond prices in recent weeks, as well as a widening of the spread between safe government bonds and low-rated corporate notes. Traders said that as the implicit guarantee gradually fades, investors were paying more attention to corporate fundamentals.

The steel industry sits at the crux of a major debate playing out across the world economy, one that could soon be intensified by a looming change in the global trade rules, the International New York Times reported. As China’s economy has slowed, the country’s manufacturers, in varied areas like solar panels, tires, aluminum and shoes, have been in a desperate hunt to maintain sales and avoid layoffs. Looking beyond their borders, many are offering rock-bottom prices to win orders. The heavy discounting has fed a backlash.

China’s banking regulator is cracking down on financial engineering that Chinese banks have used to disguise trillions of dollars in risky loans as investment products, the Financial Times reported. The clampdown, which will force banks to make provisions they previously avoided by disguising loans as investments, is designed to deflate one of the fastest-growing areas of the vast shadow banking apparatus, where bad debts are increasing.