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 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
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
Aidan Yao
Opinion

Opinion

Macroscope by Aidan Yao

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

Aidan Yao
Aidan Yao

Updated: 10:54pm, 20 Jun, 2018

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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 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
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
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Aidan Yao

Aidan Yao

Aidan Yao is senior emerging Asia economist at AXA Investment Managers. Prior to joining AXA IM, he was a senior financial market analyst at the Hong Kong Monetary Authority for two years. He started his career at the Reserve Bank of New Zealand in 2007, serving as an economist and later senior financial market analyst until late 2011. He holds a master degree in finance (2006) and a bachelor degree in economics and finance (2005) from the University of Otago (NZ). He is also a chartered financial analyst.