China’s Junk Debt Is Sliding Deeper Into Unprecedented Distress
- Authorities must balance steps to cut debt with sector support
- State guarantee program for builder bonds set for expansion
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A worsening crisis in China’s property market is dragging junk dollar bonds from the nation’s borrowers deeper into distress, as the implosion of what was once one of the world’s most-profitable bond trades sends ripples across trading floors.
Anyone who had been expecting a market turnaround from the 20th Communist Party congress which started Sunday has been left grappling with a further grind lower in China’s offshore credit market this week. President Xi Jinping gave few signals of any major changes regarding housing market policies and Covid rules that have also hampered the sector.