The Man Who Bet on Chinese Debt
When Chen Yang was fresh out of university, China’s government rarely failed to protect lenders and borrowers. Today, Beijing is allowing the bond market to grow up, forcing Chen and others like him to become experts in credit analysis.
It was 2007, and China’s economy was expanding at a blistering 14 percent a year. At Nanjing University in eastern China, Chen Yang, a finance major, was a year away from graduation. Most of his classmates were streaming into banks and brokerages to take jobs tied to a stock market that was on fire. But at a campus recruitment presentation, an American fixed-income trader pointed Chen in a different direction: bonds.
He took the advice—and went on to ride a wave of debt growth that’s proved far bigger than he’d anticipated. From the equivalent of $1.7 trillion at the end of 2007, China’s bond market surged toward $13 trillion by the end of last year.