Investors are becoming more discerning when it comes to the origin of Chinese debt, according to Bloomberg. China saw its worst start to a year on record for corporate defaults, with companies headquartered in two eastern provinces – Liaoning and Shandong – responsible for the lion’s share. Money managers are taking notice, with a run of messy, high-profile company scandals helping sour sentiment toward certain regions. Beijing’s de-leveraging drive, which has been ramped up this month and has boosted borrowing costs, is also a factor. In the past, the bond market has ignored differences in province’ risk profiles on bets Beijing will step in if they have trouble repaying liabilities, but that may be shifting. According to Nie Wen, an economist at Huabao Trust Co. in Shanghai, many institutions active in China’s corporate bond market have a “watch list” of regions they’re wary of.