Beijing is facing a further slowdown in the disposal of the country’s bad loans because foreign investors are increasingly spurning auctions of non-performing state bank assets.

China’s four “bad banks”, created in 1999 to clean up non-performing loans of the country’s biggest lenders, have been facing several buyers’ strikes by international investors who are shifting their focus to alternative targets such as private equity investments and high-yield lending to cash-starved real estate projects.