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China’s Industrial Sector Is Dogged by Defaults as Growth Slows

TOPSHOT-CHINA-ECONOMY

Source: AFP via Getty Images

China’s industrial sector is flashing warning signs of more credit stress ahead as a slowing economy makes it tougher for companies to refinance billions of dollars of debt.

A rising tide of defaults at high-yield industrial firms this year such as Kangde Xin Composite Material Group Co. and Xiwang Group Co. is fueling concerns of more debt pain as a wave of offshore repayments looms in 2020. Bank of America Merrill Lynch estimates $12 billion of industrial bonds are set to mature and is recommending investors to stay defensive given the risks of them missing on payments.