China’s corporate debt pricing is evolving as the government is allowing increased defaults, a change that began in 2014. With a steady rise in delinquencies, investors are now distinguishing among issuers based on perceived credit quality. “We’re going much more to a proper market pricing,” said Sean Taylor, chief investment officer for the Asia Pacific region at Deutsche Asset Management in Hong Kong. “What we have now is a lot more differentiation and there’s more opportunities to make money.” Looking at corporate bonds with similar ratings among different business sectors, the group with the highest rates paid about 30 basis points more than peers borrowing at the cheapest rates back in late 2014. Now, the sector paying the highest to borrow has to shell out an average of about 2% points over the strongest group, according to data compiled by Bloomberg.