BEIJING — China's state-directed economy may be creating the conditions for a new wave of bond defaults that could come as soon as next year, according to an S&P Global Ratings report released Tuesday.
It comes against a backdrop of extremely few defaults in China amid concerns about overall growth in the world's second-largest economy.
China's corporate bond default rate fell to 0.2% in 2023, the lowest in at least 8 years and far below the global rate of about 2.6%, S&P data showed.
"We've seen directives or guidance from the government in the past year to discourage defaults in the bond market."
"The question is: When the guidance to avoid the defaults in the bond market [ends], what happens to the bond market?"
Persons:
Charles Chang, that's, Chang, We've
Organizations:
Country Garden Holdings Co
Locations:
Phoenix, Heyuan, Guangdong province, China, BEIJING