DISTRESS WATCH: China Pares the Largest Pile of Troubled Debt

China may have disappointed markets Tuesday with a lack of more major stimulus, but the blitz of recent policy steps has already begun to chip away at the country’s pile of distressed debt, the world’s biggest.

In the two weeks since Xi Jinping’s government started to detail a wave of efforts to prop up the nation’s economy and turn around its property sector, the amount of corporate bonds and loans in China that is trading at distressed prices has declined by $4.3 billion, down to $197.2 billion, according to data compiled by Bloomberg News. That’s the biggest drop since May, ...