China's shadow banking adapts and grows as rules tighten

Beijing

NEW players in China's shadow banking sector are growing rapidly despite attempts to clamp down on opaque lending, taking advantage of a regulatory anomaly to prosper but also raising the risks of a build-up of debt in the slowing economy.

Authorities have sought to rein in the riskiest elements of less-regulated lending after a series of defaults, including a 4 billion yuan (S$850 million) credit product backed by Evergrowing Bank in September, because of the danger such debts could pose to the health of the world's second-largest economy.