When Beijing reacted to the 2008 financial crisis with a massive stimulus package, businesses in the infrastructure space saw an opportunity to cash in - often in ways that went beyond the official purpose of the cash influx.
Now, five years on, many are learning an important lesson: don't bite off more than you can chew.
Thousands of entrepreneurs took advantage of a flood of easy credit when Beijing announced its 4 trillion yuan (HK$5 trillion) package in late 2008 as Western economies reeled, hit by the collapse of Lehman Brothers and the credit crunch.
The stimulus was focused on infrastructure - but the companies that were eager to scoop up the cash found themselves in trouble three years later when state leaders, fearing that the boom would turn to bust, tightened monetary policies to avoid an economic "hard landing".
"We were sheer victims of the confusing and contradicting policymaking," said Shao Chunlin (not his real name), a steel trader. "It has been a cliche by the government to support the privately-owned companies. Indeed, the policies spoiled our businesses."
While many small and medium-sized enterprises, hobbled by a slump in exports, cried foul at missing out on their share of stimulus cash, steel traders were among the biggest beneficiaries of the state-backed loans.
In 2009, Shao and other steel traders were approached by banks which were actively seeking to extend loans to the private entrepreneurs.
"They simplified loan approval procedures, gave us discounts to interest rates and encouraged us to take advantage of regulatory loopholes to borrow the money," Shao said. "We are strong believers in the saying that cash is the king; therefore, we were more than happy to take the money."
Their experience was in stark contrast to that of other SMEs, who saw their exports collapse and were in desperate need of cash to revamp their production processes and add value to the finished product.
While banks were all too ready to lend money to state-owned enterprises, which they believed could help combat the global slowdown, SMEs struggled - a trend that continues today.
As Lam Wai-chi, chairman of the Hong Kong Chamber of Commerce in Guangdong, put it: "In Guangdong, it's wrong to conclude that getting a bank loan is difficult. It's simply impossible [for small businesses] to secure bank loans."
Shao, meanwhile, was finding it ever easier to get his hands on cash by making the most of his steel stock.
Shao says loan assessment officers told him he could move the same batch of steel products he had already borrowed against to a different warehouse, and use it as collateral against another loan.
"Steel products worth several million yuan could be collateralised several times to obtain credit that amounted to scores of millions," said Shao. "Nobody cared about our repayment capabilities at that time."
Some of the money went back into the steel trading business, with newly bought products being used as collateral to secure yet more easy credit.
A steel trader with a personal net worth of 100 million yuan could eventually have about 10 billion yuan of cash on hand via the aggressive borrowing, people with knowledge of the situation said.
More importantly, the frenzied construction resulted in price rises for raw materials and traders such as Shao chalked up heady gains in 2009 and 2010.
"Those were the boom years and we imagined that we could easily become billionaires in just a few years," Shao said.
And the abundant cash, combined with the credit lockdown many SMEs were suffering, presented yet another opportunity for steel traders.
Billions of yuan flew into the underground banking system in Zhejiang province, heartland of the shadow banking industry, to chase the high interest returns offered by illegal lenders.
"I didn't even bother to ask them how they would use the money," Shao said of people he lent cash to. "The borrowers promised to pay higher interest than the banks' lending rates and I just agreed on the spur of the moment. Now I don't even know where some of the cash has gone."
Steel traders also parked money in a volatile stock market, expecting to cash in as equities were buoyed by the stimulus measures.
Wei Jianing, a researcher with the State Council's Development Research Centre, estimated that at least 1.2 trillion yuan in loans was illegally invested in stocks in the first half of 2009.
The speculative capital led to an 80 per cent jump in the mainland stock market that year. But the markets have since slumped
"We allocated the money to various investments in a generous manner," said Shao. "Today, nearly all the investments have proved to be failures."
Beijing tightened lending in 2011 amid concerns about a rise in banks' bad loans.
Governments at all levels refrained from infrastructure work, leading to a sharp fall in steel prices. Meanwhile, banks cancelled loan extensions and began actively chasing those who borrowed during the boom times to replace.
A similar boom-to-bust cycle afflicted the stock market, as the Shanghai Composite Index became one of the world's worst performers between 2010 and 2012.
Meanwhile in Wenzhou , the Zhejiang city at the heart of the underground banking industry, dozens of entrepreneurs either committed suicide or fled the country following the collapse of the illegal lending industry.
"All in all, it was about the loss of the huge amount of the money borrowed from the banks," said Shao. "Several years ago, every bank was chasing us to give us money to spend, but everyone is now chasing us to give it back."
The new cabinet led by Premier Li Keqiang is determined to deleverage the economy to reduce financial risk. The State Council, which has refused to pump additional capital into the troubled banking system, is now adamant in forcing lenders to curb loan growth to avoid a bad-debt crisis.
A cash squeeze on the Shanghai-based interbank market in late June wasn't enough to ease the monetary policies.
Lam, who runs wine and clubhouse businesses and employs more than 100 workers, says SMEs in Guangdong are grappling with a situation which is even worse than five years ago.
Bank loans had carried an annual interest rate of 6 to 7 per cent two years ago but that has been raised to more than 10 per cent due to the tightening. And even those companies who can afford such a loan may struggle to get it
"Even if you are willing to pay that much interest, banks will not grant you the loan," Lam said.
For steel traders, most of whose businesses are based in the Yangtze River Delta, the sorry saga has yet to come to an end.
"Plenty of legal disputes arose as banks tried to retrieve their money while the steel traders did their best to chase repayment of the loans they granted to other businesses," said Gong Zhenhua, a partner with Ronghe Law firm. "Most of the loans were not granted legally and the loss of the money has already caused a stir in the steel trade sector."
Deloitte Touche Tohmatsu predicts that the bad-loan woes affecting bank branches in the delta are likely to spread to other coastal areas such as Shandong and Fujian as a result of the ripple effect of the fraudulent loans secured by the steel traders.
Beijing's tight macroeconomic control have been blamed for the chaotic scene.
"Decision-makers draw up policies in a small meeting room with doors closed, but how can the policies mapped out at a closed-door meeting work on a big territory?" pondered Feng Lun, chairman of Vantone Real Estate and one of the country's most prominent entrepreneurs. "The policies are always confusing the businesspeople and we are not sure whether the authorities understand the policies themselves."
Shao knows all about the pitfalls - his business went bankrupt last year amid a flurry of lawsuits from banks trying to recover cash he long since lost in speculative investments.