Biggest Money Fund Shuns Companies on Default Risk: China Credit

China’s biggest money-market fund has cut its holdings of corporate debt by more than 50 percent and sought safety in deposits as rising borrowing costs increase the threat of default.

“We won’t touch high-risk bonds that can have credit risks,” said Wang Dengfeng, Beijing-based manager at Tianhong Asset Management Co., which oversees the Yu’E Bao fund sold online by Internet billionaire Jack Ma. “Liquidity will remain relatively tight this year, as deleveraging continues to be the central bank’s focus. Authorities’ regulation of the interbank business and shadow banking may result in a period of pain.”