The Legal Treatment Of Chinas Corporate Debt Problems

Earlier this year repayment problems with a trust product and a default by a Chinese company on a publicly offered and listed bond attracted the interest of market participants. Both cases have been dealt with within China's existing legal framework, and investors have not suffered any untoward effects. China's corporate debt problems have been associated with sectors suffering from overcapacity and in need of reform. Such reforms will need to go hand in hand with financial reform.