Comment by narrator

Non-performing loans of state-owned entities get bought by asset management companies (AMCs) with AMC liabilities. People's Bank of China liquifies AMC Liabilities so the banks keep lending.[1] AMCs often then can't pay because the state-owned entity isn't able to pay on the loan it bought. They then get bailed out by the Ministry of Finance, but the actual source of funds inside the government is difficult to discern [2].

[1] https://www.rba.gov.au/publications/bulletin/2024/apr/chinas... [2] https://newbagehot.yale.edu/docs/china-1999-asset-management...