HONG KONG, April 26 (Reuters Breakingviews) – China’s bad banks will survive the loss of their bad bankers. China Huarong, one of the largest of the state asset managers formed to clean up the commercial lenders’ balance sheets back in 1999, is being humbled as graft busters take down Chairman Lai Xiaomin and probe staff. Even so, as institutions Huarong and its peers are case studies in political survival. With around $270 billion of bank loans gone sour, Beijing will probably need to keep them around a bit longer.

Mission creep is part of the reason for their longevity. The political and financial complexities of deals, many involving credit extended to failing state-owned enterprises, sucked Huarong and its ilk into financial services, property development and other areas. They also expanded into more ho-hum deals, such as buying accounts receivables. Many Chinese lenders lacked the capability to do this kind of business, so Huarong and its rivals thrived. In 2017 the company boasted around $300 billion of assets, up more than fourfold from 2013, and earned about $3.5 billion.

After Lai’s defenestration, regulators said Huarong should stick to its core business. The investigation continues, with the Financial Times reporting on Thursday that staff in Hong Kong have been asked to hand over travel documents. But officials have winked at the industry’s expansion in the past, and the government’s dedication to disciplining them waxes and wanes depending on macroeconomic conditions. That many borrowers and lenders are state-owned makes things even more awkward.

The asset managers fill a genuine need for expertise in a semi-liberalised distressed debt market. As important, they allow China’s systemically important commercial banks to keep their non-performing loans at a low 1.7 percent of the total, and keep lending. If the economy cools sharply due to trade war or a housing slowdown, debt stress will return. All told, it’s better to keep these bad boys on hand.