Regions will shore up China's smaller banks

Beijing

CHINA'S regions will back local banking champions. Anxious economists in Beijing may want to rein in risk-hungry local banks, but provincial officials have every reason to keep them afloat, as bad loans mount and capital buffers erode.

Industrial Bank, a mid-tier lender based in Fujian province, is the first of what is likely to be a queue of banks hitting up backers for capital. On July 29, it announced plans to raise US$3.9 billion from six friendly shareholders, including its provincial Department of Finance and centrally owned China Tobacco.