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BEIJING—China is letting up on its drive to maintain a lid on debt progress because it faces a softening financial system at house and escalating commerce tensions with the U.S.

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Senior Chinese language leaders led by President Xi Jinping have been sending unmistakable indicators that the marketing campaign to rein in monetary danger isn’t the overriding precedence it has been. Monetary regulators are delaying the discharge of guidelines to curtail dangerous lending by banks and different establishments out of concern that the rules would choke off a supply of funding and rattle monetary…

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