A complicated drama is unfolding among three major Chinese firms that have invested in each other, highlighting wider concerns over the country`s growing debt problem.
The recent events, which also loop together longstanding financial system issues like accounting trickery and overspending, are continuing to weigh on investor sentiment — even though China`s second-quarter economic growth beat analyst expectations on Monday.
"The Chinese market fell [Monday] despite the solid second quarter growth because of policy signaling from the central government that the efforts to mitigate financial sector risk through regulatory crackdown and deleveraging will continue," said Todd Lee, senior director of economics at IHS Markit.
Here`s a breakdown of the soap opera drama and how the complicated relationship between Dalian Wanda, Sunac and LeEco means woes at one firm could ripple to the others.
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