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Chinese Economy: China’s Bond Market Beginning to Unravel
After an unprecedented boom, China’s $3 trillion corporate bond market is beginning to unwind, a sign that yet another bubble is about to burst in the world’s second largest economy. A surge in defaults at state-run enterprises has ignited concerns that growing risk aversion among creditors could impact the outlook for Chinese property developers, which accounted for about 40% of corporate bond issuance in 2015. This suggests that developers will face greater difficulty raising funds for this year despite higher cash flows stemming from a renewed upturn in the property market. Property sales amounted to 600 ... (full story)