People touch a bull statue on display outside a mall in Beijing, on June 18. A structural reshaping of the market will cause short-term pain, but rising defaults in the credit market suggest that the authorities are allowing the market to better price risks, which will only make the economy healthier. Photo: AP
Opinion
Opinion
Macroscope
Bond defaults in China are a necessary pain for a healthier economy
Aidan Yao says the rash of defaults in the corporate bond market, a result of Beijing’s deleveraging drive, must be tolerated to reap longer-term rewards
People touch a bull statue on display outside a mall in Beijing, on June 18. A structural reshaping of the market will cause short-term pain, but rising defaults in the credit market suggest that the authorities are allowing the market to better price risks, which will only make the economy healthier. Photo: AP