For years, defaults were few and far between in China's corporate bond market. Most investors thought that the Chinese government would never let companies — whether they be state-owned enterprises (SOEs) or private businesses — actually default on their debt. But times have changed. Defaults by private companies have been rising and there's even a question mark over the implicit government guarantee in debt sold by SOEs. One state-owned enterprise in Tianjin has proposed a 64% haircut for bond investors, in what could amount to the first de facto default by an SOE in more than two decades. On this week's episode of the Odd Lots podcast we speak with Jun Pan, Professor of Finance at Jiao Tong University, about her recent research examining what China's corporate bond prices are actually telling us about the health of its companies and wider economy.

For years, defaults were few and far between in China's corporate bond market. Most investors thought that the Chinese government would never let companies — whether they be state-owned enterprises (SOEs) or private businesses — actually default on their debt. But times have changed. Defaults by private companies have been rising and there's even a question mark over the implicit government guarantee in debt sold by SOEs. One state-owned enterprise in Tianjin has proposed a <a href="https://www.bloomberg.com/news/articles/2019-11-25/china-s-tewoo-seeks-debt-haircut-of-up-to-64-on-dollar-bonds">64% haircut</a> for bond investors, in what could amount to the first de facto default by an SOE in more than two decades. On this week's episode of the Odd Lots podcast we speak with <a href="http://en.saif.sjtu.edu.cn/junpan/">Jun Pan</a>, Professor of Finance at Jiao Tong University, about her <a href="http://en.saif.sjtu.edu.cn/junpan/Credit.pdf">recent research</a> examining what China's corporate bond prices are actually telling us about the health of its companies and wider economy.

Bloomberg's Joe Weisenthal and Tracy Alloway explore the most interesting topics in finance, markets and economics. Join the conversation every Monday and Thursday.

Bloomberg's Joe Weisenthal and Tracy Alloway explore the most interesting topics in finance, markets and economics. Join the conversation every Monday and Thursday.

Bloomberg's Joe Weisenthal and Tracy Alloway analyze the weird patterns, the complex issues and the newest market crazes. Join the conversation every Tuesday and Thursday for interviews with the most interesting minds in finance, economics and markets.

Odd Lots

On Bloomberg’s Odd Lots podcast Joe Weisenthal and Tracy Alloway explore the most interesting topics in finance, markets, and economics. Join the conversation every Monday and Thursday. 

On Bloomberg’s Odd Lots podcast Joe Weisenthal and Tracy Alloway explore the most interesting topics in finance, markets, and economics. Join the conversation every Monday and Thursday.

How Bond Defaults Are Changing China's Markets

https://api.omny.fm/orgs/e73c998e-6e60-432f-8610-ae210140c5b1/clips/eb457386-e450-4fe3-8ccd-ae270051f5f3/transcript

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