China’s local governments are struggling to repay trillions of dollars in infrastructure debt, just as more property developers tip into distress, according to Bloomberg News’ Wei Zhou. A Chinese municipal default would send shock waves through global markets, but Beijing is at pains to avoid the moral hazard of a bailout. In this episode of the Credit Edge Podcast, Bloomberg News senior editor James Crombie also asks Bloomberg Intelligence analyst Himanshu Bakshi about the risk to Canadian banks of a spike in mortgage defaults. The main financial institutions can withstand significant real estate stress, though their bonds may come under pressure.