- Between October and December 2020, three companies were involved in high-profile, unexpected bond defaults in mainland China.
- The recent high-profile defaults by the three SOEs have totaled about CNY6.3 billion so far. This is a small proportion of total corporate bond issuance so far in 2020, according to IHS Markit's calculations using China Bond data.
- The latest defaults occurred in the third quarter of 2020 after the domestic economy recovered, instead of during the sharp economic recession in the first quarter. They are likely to reflect a lagged reaction to economic slowdown, initially mitigated by policy measures supporting the corporate sector. Poor profitability is another factor behind SOEs' defaults.
For further details see:
China's Bond Defaults