Xi Jinping will be furious! China's 'debt demolition teams' are now defaulting, The Economist reveals

China's efforts to manage its mounting debt crisis are encountering a new and worrying complication: the very companies designed to resolve bad debts are now in financial trouble themselves. These asset management companies, often referred to as "debt demolition teams," were established to absorb non-performing loans and stabilize the financial system. However, reports indicate that some of these crucial institutions are now struggling to stay afloat, adding another layer of risk to an economy already grappling with a severe property sector downturn. The Economist highlighted this emerging crisis, noting that a court approved the restructuring of Guohou Asset Management in late July. This development suggests that the bad debt problem may be more pervasive than previously understood, potentially impacting the stability of China's broader financial landscape and challenging President Xi Jinping's economic management.