China's Deleveraging Bill Tops $500 Billion
- Bonds, stocks and metals sink as regulators tackle leverage
- JPMorgan Asset says markets may fall 10% before Beijing blinks
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How much pain can China’s leaders stomach? It’s becoming a key question for investors as the government’s clampdown on financial leverage ripples through markets.
The tightening campaign has erased at least $453 billion from the value of Chinese stocks and bonds since mid-April, spurred $21 billion of canceled debt sales and compelled the People’s Bank of China to inject $48 billion into jittery money markets. Sales of asset-management products by lenders and trust companies have plunged by more than 30 percent, while domestic real estate transactions have slowed and metals prices have buckled.