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Chart Of The Moment: Cracks In China's Great Wall Of Debt

Aug. 05, 2021 7:54 AM ET2 Comments


  • The China high yield bond market is facing growing credit and default risks.
  • In addition to the recent rout in the technology and for-profit education sectors, investors are also following developments around several situations in China’s debt markets, including distressed asset management and property market sectors.
  • As a result, Chinese high yield bonds are currently trading at distressed levels with spreads just over 1,000 bps, while high yield property spreads are 5x that of investment grade property.

China national flag overlaid with Yuan renminbi banknotes. Chinese money and political situation. Concept of Chinese financial and business markets changes
Grindi/iStock via Getty Images

Hard currency corporate and sovereign credit valuations continue to trade toward the tighter end of historical ranges. One notable exception is the China high yield bond market, which is facing growing credit and default risks. As a result, Chinese

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