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posted by martyb on Thursday May 09 2019, @02:39AM   Printer-friendly

Bloomberg:

This year is shaping up to be the biggest by far for defaults in China’s $13 trillion bond market, highlighting the widening fallout from the government’s campaign to rein in leverage.

Companies defaulted on 39.2 billion yuan ($5.8 billion) of domestic bonds in the first four months of the year, some 3.4 times the total for the same period of 2018, according to data compiled by Bloomberg. The pace is also more than triple that of 2016, when defaults were more concentrated in the first half of the year, unlike 2018. The trend is clear: unless something changes, 2019 will be the new high.

China continues to press banks to extend credit to the private sector, and small and medium-sized companies especially. The latest move came Monday, when the central bank loosened some reserve-requirement rules for lenders. But President Xi Jinping’s team has also focused on shrinking the shadow-banking system, where credit decisions were made with less regulatory oversight and where it was easier to build up unsustainable leverage.

Beijing often uses such measures to quell domestic political opposition in the party. Is there something bigger afoot?


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  • (Score: 3, Insightful) by Azuma Hazuki on Thursday May 09 2019, @03:29AM (1 child)

    by Azuma Hazuki (5086) on Thursday May 09 2019, @03:29AM (#841179) Journal

    Never, but never, interrupt the enemy when they are destroying themselves. If it turns out the "Communist" Chinese destroy their economy with unchained capitalist idiocy, I will laugh hard enough to pass out.

    --
    I am "that girl" your mother warned you about...
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  • (Score: 1, Interesting) by Anonymous Coward on Thursday May 09 2019, @04:39AM

    by Anonymous Coward on Thursday May 09 2019, @04:39AM (#841202)