China’s Regulatory Storm Risks Triggering Wider Economic Damage

HONG KONG—China’s high-profile crackdowns on property developers, technology firms and other private enterprises are starting to weigh on business activity and add to financial risks in the country, raising the potential that Beijing’s campaigns could harm the broader economy.

Over the past year, China has taken numerous regulatory actions, including fines and other penalties, affecting a range of industries as it tries to reduce inequality, rein in excessive debt and force businesses to hew more closely to the Communist Party line. Beijing officials signaled that the country’s strong recovery from Covid-19 provided a window of opportunity to act, enabling them to tackle social and economic imbalances without derailing its overall growth trajectory.