China Bond Buyers Quiz Taxi Drivers to See If Credit Good
- Poor disclosure practices in China leave need for field trips
- Without doing legwork, investors ‘may step on a land mine’
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In China, taxi rides aren’t just a form of transportation any more. They’ve also become useful for bond buyers doing due diligence. Dining out at restaurants is also helpful.
It’s all part of a boom in field trips by market participants coming to grips with a new reality in China: the potential for bond defaults. After decades when authorities effectively provided blanket assistance to keep troubled companies from going under, the Communist leadership’s focus on shuttering unproductive assets has upended the market.