China’s shadow banking sector poses ‘rising risks of a financial crisis’: report

The Chinese government has been engaged in a decade-long campaign to stave off a financial crisis triggered by excessive debt growth, an effort that has critically damaged its $10.7 trillion real-estate debt market and set the stage for a political showdown between local and central governments as the country attempts to navigate sharply slowing economic growth and new geopolitical headwinds.

At the heart of Beijing’s debt problems has been the growth of the so-called shadow banking sector, made up of firms that act like…