"Interesting development: an article on XinhuaNet re Wenzhou, Zhejiang province financial problems referenced by Fullermoney has disappeared. A check of logs shows it was taken down within 4 hours of publication.

"I was asked if this was a local problem or reflected a wider issue.

"This is a consequence of the Central Government tightening of Bank lending to private companies. One aim was to cool the property speculation market. Private sector rates shot up across China. Therefore, although some areas and markets will be more vulnerable and crack first, the whole system is under stress. The speed of reaction to take this story down implicitly suggests the Authorities are aware the stress the Private sector is under and that property problems could spread to the enormous local Government holdings.

"Keeping the property market suspended above ground level until real demand catches up in some years time is a fascinating spectacle for market watchers. Alas we are not truly disinterested. Failure will roll on to affect us all."

Eoin Treacy's view Thank you for this contribution which I'm sure will be of interest to other subscribers. The article you mention has been reposted with no alterations that I could see. The bankruptcies in the export hub Wenzhou reflect where the most pressure from the current round of tightening is being experienced. The export sector has seen margins compress and access to credit tighten and the most leveraged are flirting with bankrupt.

This article from Bloomberg suggests the Wenzhou municipal authorities are attempting to bring the sector to heel while this article from STD quotes Citic International ""China has about 40 million SMEs, including several hundred thousand in Wenzhou. And only 100 SMEs in that city failed to pay off loans. The percentage is small,"

Engineering an orderly cool down in the property market is a major challenge but the Chinese government has more firepower than any other country to ensure its desired outcome. Over the short-term, risk remains skewed to the downside for large cap shares, at least until the PBOC signals a change of policy.