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
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.