China’s $40 Trillion Man Has the Toughest Job in Global Finance

China’s chief bank regulator has pledged to cut the surfeit of government backstops on savings and investments.

Guo Shuqing understands that the stakes are high in navigating a banking system twice as large as that of the United States. Guo needs to make “financial risk and return go hand in hand.” Reaching that goal means creating new rules by which the government will no longer bail out all lenders and investors when transactions go wrong. And he needs to dispel people’s doubts about that, while dealing with a trade war and excessive debt that imperils China’s $13 trillion economy.

As of late 2019, Guo had eliminated guarantees...