As bond defaults become an accepted norm in China, Beijing is shifting its focus to what happens next, Bloomberg News reported. China’s regulators are pushing to improve the debt restructuring process, currently notoriously opaque and protracted. Senior officials from bodies including the central bank and securities regulator this week urged that defaults be handled more efficiently and transparently, saying that action is needed to restore investor confidence. The stakes are getting higher, with corporate bond failures in China rising to a fresh record of more than 131.1 billion yuan ($18.7 billion) this year. While that is encouraging better pricing of risk, the lack of a reliable system to clean up after a default has unsettled some investors and made them reluctant to provide financing to lower-rated companies. Guidelines jointly drafted by China’s central bank, economic planning agency and securities regulator will soon be released, the official Xinhua News Agency reported late Tuesday, citing Liu Guoqiang, a deputy governor of the People’s Bank of China. Watchdogs have already sought to unify the fragmented regulatory framework for corporate bonds.
