It’s hard to pick which nation will spark the next major banking crisis. But the latest moves out of China are certainly troubling. Over there, a new debt relief plan for debt-laden companies has been added to a growing list of systemic financial risks that includes unsustainable credit growth and credit-driven malinvestment. The debt relief plan unveiled earlier this month by China’s State Council, would allow Chinese companies to reduce their $18 trillion corporate debt burden by swapping some of that debt into equity. The debt-to-equity swap guidelines first floated back in March, encourage companies to deleverage by offering bank lenders equity ownership in return for debt forgiveness. To the discerning reader, that sounds more like a Hail Mary pass to save insolvent companies from bankruptcy than prudent financial policy.