Companies as diverse as retailers and gadget makers are reporting weakened results from China, as the economic slowdown there blunts Beijing's drive to make the nation's consumers a bigger driver of growth, The Wall Street Journal reported. Last month, Canon Inc. cut the Japanese company's year-end profit forecast to ¥380 billion ($3.89 billion), off 16% from forecasts three months earlier, citing in part the slowdown in China. Nike Inc.

Chinese regulators have tried for months to rein in lending by the country's banks, most recently by instigating a cash squeeze that left some scrambling for funds. But the banks have stayed one step ahead, keeping the lending spigots open largely through increasingly complicated transactions, The Wall Street Journal reported. The banks' latest effort in their cat-and-mouse game with regulators involves making corporate loans appear on their balance sheets as less risky loans to banks.

Fresh evidence of rapidly rising house prices underlined the role a resurgent property sector has played in supporting China's fragile growth, but also raised fears that a sharper correction would be required to bring prices into line with income. Prices rose an average 6.7% year-over-year in July, up from 6.1% in June, calculations by The Wall Street Journal based on official data released Sunday showed. On a month-to-month basis, the increase in prices moderated slightly.

A cornerstone of China's financial edifice is beginning to show some cracks, The Wall Street Journal reported. The country's banking sector, a key part of a financial system that has powered China through three decades of breakneck expansion, is feeling the strain of years of rapid credit growth. Bank-fueled lending to state enterprises and local governments has led to overcapacity; serious debt problems for local governments, companies and lenders alike; and numerous white-elephant projects, from nearly empty malls and resorts to bridges to nowhere.

China’s broadest measure of new credit fell to a 21-month low as Premier Li Keqiang extended a campaign to curb a record expansion of lending that’s added dangers to the nation’s financial system. Aggregate financing was 808.8 billion yuan ($132 billion), the People’s Bank of China said in Beijing, compared with the 925 billion yuan median estimate of analysts surveyed by Bloomberg News. New yuan loans exceeded forecasts and accounted for about 87 percent of the total, the most since September 2011. M2 money supply growth unexpectedly accelerated to 14.5 percent.

A Chinese lending spree of the magnitude that tipped Asian nations into crisis in the late 1990s and preceded Japan’s lost decades is putting pressure on top leaders to map out a strategy to tackle the threat. Half of the economists in a Bloomberg News survey say non-performing local-government and corporate debt will probably have a “significant impact” on China’s credit and economic growth.

Three quarters of China's solar-grade polysilicon producers face closure as Beijing looks to overhaul a bloated and inefficient industry, resulting in fewer but better companies to compete against Germany's Wacker Chemie AG and South Korea's OCI Co Ltd., Reuters reported. The polysilicon sector, which has around 40 companies employing 30,000 people and has received investment of 100 billion yuan ($16 billion), suffers from low quality and chronic over-capacity as local governments poured in money to feed a fast-growing solar panel industry, for which polysilicon is a key feedstock.

The Chinese state owes a lot of money – but even in Zhongnanhai, the secluded compound where the Communist Party’s top brass have their headquarters, no one really knows how much, The Wall Street Journal China Real Time Report blog reported. Sovereign debt issued by the central government in Beijing stands at 8.4 trillion yuan ($1.4 trillion), or 16% of GDP, as of the end of last year – wonderfully low by western standards.

China will conduct an urgent review of overall public debt, highlighting concerns about burgeoning official borrowing that are adding to stress in China's financial system and limiting Beijing's capacity to support flagging growth, The Wall Street Journal reported. In a one-line statement on Sunday, China's National Audit Office said it would carry out an examination of total government debt, acting on the orders of the State Council, China's cabinet.

China ordered more than 1,400 companies in 19 industries to cut excess production capacity this year, part of efforts to shift toward slower, more-sustainable economic growth, Bloomberg reported. Steel, ferroalloys, electrolytic aluminum, copper smelting, cement and paper are among areas affected, the Ministry of Industry and Information Technology said in a statement yesterday. Excess capacity must be idled by September and eliminated by year-end, the ministry said, identifying the production lines to be shut within factories.