Finweek English Edition

One to watch


In decades gone past one of the big concerns was a large default by a Chinese company that could trigger a ripple effect of more defaults. This fear has receded in recent years, but the likely default of China’s Evergrande Group is worth watching. They have debts of $300bn and their debt yields are now above 100% as the market assumes a default.

I don’t think this will end as a worst-case scenario; the Chinese financial system is much stronger and the debt market more advanced than even just a decade ago. But keep an eye on how this plays out. China’s Evergrande Group going bust and defaulting without much collateral damage would be a good sign as it will confirm a much-improved Chinese financial debt market.

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