1. How big is the problem?
Chinese defaults actually dropped by 20% in the first three quarters of 2020 to 85.1 billion yuan ($13 billion), according to Bloomberg-compiled data. That was largely due to pandemic-related measures in the first half: At least a dozen companies managed to relieve pressure by delaying repayments, swapping bonds or canceling early repayment. However, short-term measures often end up just buying time, while the credit risk remains. Defaults picked up again in the second half, and investors were predicting another record year. In 2019, onshore defaults totaled more than 141.9 billion yuan, dominated by private enterprises. (The 2018 total of 122 billion yuan was itself more than quadruple the level in 2017.)…
Read the full article at: https://www.washingtonpost.com/business/energy/why-chinas-debt-defaults-are-more-alarming-this-time/2020/11/23/3b81f794-2d6f-11eb-9dd6-2d0179981719_story.html
Related Posts
