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We study corporate default and its resolution among all commercial loans over RMB￥ 50 million from the largest 19 Chinese banks from 2006 to 2012.We confirm some prior beliefs: borrowers from government-designated strategic industries or owned by the state default more frequently and typically perform poorly after default.Big Five state owned banks and poor regional development aggravate such effects.However,we find significant evidence of beneficial relationship banking,in spite of potential soft budget and hold-up problems and the incomplete development of China's financial system.Thus,as the Chinese economy evolves,some features of its centrally-planned origins persist while other features of a modern effective banking system are emerging.