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China’s Newest Problem With Fakes Threatens Bond Market Pain

  • Firms to experience trouble selling new bonds as old mature
  • 56% of Chinese execs say unethical behavior can be justified
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The Long-Term Risk of China's Debt

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Forged seals, fake letters, and counterfeit documents. They’re all part of China’s recent spate of fraud coming to light in the country’s $3 trillion corporate debt market amid a rout that has analysts predicting a record number of defaults in 2017.

As it becomes harder for Chinese companies to issue new notes to repay maturing debt, expect more scandals to come -- and to worsen the bond market’s already-precipitous downturn.