Major Chinese Developer Insolvent; Sign Of Things To Come?

The ongoing debate about Chinese growth, both how much of it is real and whether the government can reign it in gradually and avoid a crash, is about to be put to the test. Chinese development firm Zhejiang Xingrun Real Estate Co. is insolvent with 3.5 billion yuan ($562 million) in debt and its residential projects put on hold, Bloomberg reports, and this looks like just the beginning.

When booming GDP growth was the main priority, the Chinese government was content to allow lax lending standards to drive investment in projects that...