Infrastructure and small-scale private industry are suffering from the shadow banking crackdown championed by President Xi Jinping. But two other important drivers of the economy—state-owned firms and real estate—are doing well. As long as real estate holds up, a sharp slowdown remains unlikely. Real estate is thriving thanks to a massive Beijing-financed apartment-buying program for “slum dwellers,” which has kept inventories near multiyear lows. That helps prices keep rising, even though sales growth has been trending sideways. Developers have also proven adept at finding ways around restrictions on shadow banking. One helpful development has been the explosion of asset-backed securities , including so-called supply chain ABS, which has allowed developers to put off paying their contractors for up to a year. Overall shadow credit outstanding fell 3.8% on the year in August, and infrastructure investment growth in the first […]