Published: 5:02am, 18 Jul, 2018 Updated: 5:02am, 18 Jul, 2018
Most of China 's private companies have to rely on alternative areas for funding , such as shadow banking , since they have restricted access to mainstream banks . However , with the Beijing government cracking down on shadow banking , causing off - balance - sheet funding to collapse by CNY1.3tn ( $ billion ) in H1 2018 , private businesses have become the biggest losers , with some resorting to loan sharks for financing . This has become apparent in China 's corporate bond markets where , by early June , 20 corporate bond defaults totalling CNY14.2bn took place , many of them by listed private companies . Furthermore , the corporate default risks have hit private companies ' bond ratings .