How China's P2P crunch helps deleveraging drive

China's crackdown on online microlending may send shockwaves across the financial industry in the short run but will likely benefit the country's deleveraging efforts.

As Beijing steps up its efforts to wean the Chinese economy off an excessive debt-rich diet it seems ready to exchange short-term pain for long-term gain.

That includes killing off some peer-to-peer lenders and by extension paring down some of the higher-risk debt in the comparatively neglected household sector.
 
For the most part, public discussions around China’s deleveraging campaign have been at the institutional level, namely Beijing’s attempts to place a tighter grip on local government financing, rein in corporate debt, and press state-owned enterprises into debt-for-equity swaps.

In that respect China has made some progress, with corporate...

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