So an uneasy tremor passed through world markets earlier this week after China's respected Caijing magazine reported that Beijing will allow state-owned enterprises to walk away from loss-making derivatives contracts, rather than pay up the money they owe.

According to the magazine, the State-owned Assets Supervision and Administration Commission, or Sasac, wrote to six foreign banks warning them that 'state-owned enterprise will reserve the right to default on commodities contracts'.

If Chinese companies did renege on money-losing contracts, it would not be the first time. Reports this week describe how China's internal waterways have been blocked by hundreds of barges carrying tens of thousands of tonnes of steel after buyers refused to take delivery following an abrupt fall in the price of the metal over recent weeks (see the first chart below).

And in the 1990s, Chinese steel mills were notorious for walking away from their contracts to buy iron ore whenever the spot market price fell below the contracted price.

Now a clutch of big state-controlled airlines and shipping companies are sitting on large unrealised losses on their commodity derivative positions after betting last year on a rise in fuel prices.

The second chart below shows why. Although the price of jet fuel has risen 67 per cent since March, it remains 58 per cent below last summer's peak.

If an airline had attempted to lock in the price last summer in anticipation of further gains, it would still be bleeding red ink. Sasac wants to staunch that flow.

Despite the tone of Caijing's report, an outright default on state companies' derivatives positions is unlikely.

Lawyers representing international banks say Beijing's position is more nuanced than the Caijing article made out, with Sasac suggesting that international banks amend the contracts to reduce state company losses, rather than simply threatening that state companies will walk away from their deals.

Bankers now fear a barrage of requests for negotiated termination of the contracts. Accepting negotiated settlements would be pricey for the banks, which have hedged their own exposures in international markets and could end up facing big losses on those hedges.

But they may have little choice. Because there is no specific regulation on the mainland permitting state companies to trade over-the-counter derivatives in international markets, the companies are expected to claim that they had no authorisation to enter into the contracts in the first place, an argument that proved successful before.

'It's the standard complaint when you don't want to pay,' one lawyer remarked.

Unwilling to jeopardise their other mainland businesses, the international banks may well decide simply to grin and bear the pain, consoling themselves that the cost of terminating now will be significantly less than it would have been six months ago before commodity prices rallied.

Even so, there will be a long-term price to pay. Foreign banks will be more wary of doing derivatives business on the mainland.

And having once wormed their way out of a losing position, China's state companies will face suspicion, which will make it more difficult and more expensive for them to hedge their commodity exposure in the future.

And the bad blood will prove hard to wash out. It's been years since Chinese steel mills reneged on their iron ore contracts in response to falling prices, but the resulting mistrust still taints the annual benchmark price negotiations between miners and steel companies.

'My word is my bond' might sound anachronous today, but once you've broken your bond, it can take a long time to repair the damage.