Goldman: China's Corporate Bonds Are a 'Microcosm' of Its Credit Problems
A willingness to default could indicate a willingness for structural reform.
A Shanghai Chaori Solar Energy Science and Technology Development Co. stand sits at an exhibition in Beijing in 2012.
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Want a clue as to whether China will embark on structural reform of its bloated corporate sector, or shed its addiction to credit-fuelled growth?
Analysts at Goldman Sachs Group Inc. suggest watching the onshore Chinese bondsmarket.
China's domestic corporate bond market has been around for just over a decade and in that period has experienced only 18 official defaults, with the first not taking place until 2014, when Shanghai Chaori Solar Energy Science & Technology Co. failed to repay its lenders on time. Defaults were roughly split between private companies and state-owned enterprises (SOEs) famous for their inefficiency.