China bond defaults a way to price risks: analysts
A rise in delinquencies is leading investors to distinguish among issuers based on perceived credit quality
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JUST as global investors get a new channel to access China's US$9.8 trillion onshore bond market, it's starting to look like one that they might recognise.
Gone are the days when China's corporate debt was all pretty much priced the same, with an implicit government backstop giving buyers little reason to demand higher returns from some borrowers over others. Things started changing in 2014, when the Communist Party leadership with little warning began to allow defaults. With a steady rise in delinquencies, investors are now distinguishing among issuers based on perceived credit quality.
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