Reasons for this include tighter control over banks.
Chinese bond market this year could face the largest default in its history in the amount of 13 trillion dollars.
According to the Agency, in the first four months of this year, Chinese companies have already defaulted on domestic bonds for 39.2 billion yuan (5.8 billion USD) is approximately 3.4 times more than in the same period last year.
The pace of development of this process now three times higher than in 2016, when the risks of default were concentrated in the first half of the year, the Agency said.
Reasons for this include tighter control of the banks and pressure them to provide loans to small and medium businesses. The fight against “shadow banking” led to the fact that the company loses funding, says the Agency.
“Short maturity bonds means that companies often need to refinance their obligations,” say analysts from Moody’s Investors Service. Banks lend to such companies reluctantly, therefore, they rely largely on “shadow banks”, the number of which is rapidly declining, explain the experts.
As previously reported, the people’s Bank of China will lower reserve requirements for small and medium-sized banks to encourage small business lending.
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