Bankruptcies surging in China

Bankruptcies of Chinese businesses have surged in the past two years, in a sign the state is beginning to take painful steps to trim the bloated industrial sector as it tries to rein in debt, The Wall Street Journal reports.  The common practice: Keep failing companies alive with state support to preserve output and avoid the political risks that come with large-scale layoffs. Cash injections have saved jobs in the short term, and delayed harder decisions on how to shift economic expansion to a more stable footing. According to official figures from China’s Supreme People’s Court, from 2012-14 there were about 2,000 bankruptcy cases each year – just 0.25% of the roughly 800,000 companies that left the market each year. That jumped to a record 3,683 in 2015, and higher again to 5,665 cases last year, as corporate debt sharply surged and the court began to urge wider use of the law.