“There is no playbook for this,” said Logan Wright, director of China research at Rhodium Group, a consulting firm. China’s regulators are now faced with the challenge of following through with a promise to clean up the financial system while also preventing a possible meltdown, he said.

“You’re pitting Beijing’s new rhetoric that they are cracking down against the assumption that they will ensure the stability of the system,” he said.

The government is likely to inject some money into whatever reorganized company eventually emerges from Huarong’s difficulties, but it is not prepared to inject enough money to pay off all of the bonds, the two people familiar with the government’s plans said.

Even as the government crafts a plan to downsize Huarong, the company has sought to calm investors’ nerves, promising that it can pay its bills. Speaking to state media, Xu Yongli, vice president of Huarong, likened his firm to other critically important Chinese financial institutions.

“The government support received by Huarong is no different,” he said.

Alexandra Stevenson and Cao Li reported from Hong Kong and Keith Bradsher reported from Beijing.

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