China’s Growing Dollar Bond Defaults Reveal Depth of Stress

$4 billon offshore defaults this year beat 2019 total
Chinese onshore bond failures down 31% amid credit boom

Pedestrians wearing protective masks walk past the People's Bank of China (PBOC) building in Beijing, China, on Tuesday, March 17, 2020. China suffered an even deeper slump than analysts feared at the start of the year as the coronavirus shuttered factories, shops and restaurants across the nation, underscoring the fallout now facing the global economy as the virus spreads around the world.Photographer: Bloomberg/Bloomberg

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By Bloomberg News

June 23, 2020 at 10:00 PM UTC

Updated on

June 24, 2020 at 3:19 AM UTC

This article is for subscribers only.

Surging dollar bond defaults by Chinese companies highlight the increasing pressure the nation’s firms are facing as the economy slows.

While the picture looks almost rosy onshore, with the total value of defaults falling 31% to 38 billion yuan ($5.4 billion) this year from a year earlier, the situation is far from comforting offshore. Debt failures in the dollar market have jumped nearly 150% to $4 billion -- already above the total for the whole of 2019.