Stress Is Building in China's $12T Onshore Credit Market

The transcript discusses the credit stress in China's onshore and offshore markets. Onshore, developers are defaulting due to prioritizing onshore debt amidst a lagging property market. The People's Bank of China is advising banks against buying certain bonds. News of project completions is not boosting investor confidence, as it merely extends existing loans. Offshore, credit stress has eased slightly, but major developers still face significant challenges, with potential restructuring and bond payments looming.

What was the primary reason for the defaults by major developers onshore last year?

• Prioritization of offshore debt payments

• Lagging property market

• Increased investor confidence

• Government intervention

How did the People's Bank of China influence the LGFE bond market?

• By increasing interest rates

• By restricting banks from buying bonds in the free trade zone

• By encouraging banks to buy more bonds

• By providing subsidies to bondholders

What is the main focus of the recent news discussed in the second section?

• Improving liquidity of companies

• Extending loans to complete unfinished projects

• Reducing interest rates

• Increasing sales for developers

What is the current focus of the offshore market according to the third section?

• Developers facing new defaults

• New entrants in the market

• Government-backed projects

• Survivors of last year's market stress

What potential issue is Ocean, a state-backed developer, facing?

• New project launches

• Government subsidies

• Increased bond prices

• Onshore restructuring