A new report released points to an accelerating rate of Chinese companies defaulting on debt repayments, Caixin Global reports, as Beijing’s financial crackdown and slowing profit growth is tightening the private sector’s liquidity.
The report, issued by state-owned China Central Depository & Clearing Co. (CCDC), showed that 15 companies have failed to repay bonds in the first four months of 2018, a 25% increase on last year. The value of the bonds rose by 34% to total RMB 12.9 billion ($2.04 billion).
“If you look at the defaults that have already occurred this year, default pressure is relatively high right now,” said senior deputy manager of the CCDC’s statistics and monitoring department.
“We can expect the amount of defaults to increase in May on a year-to-year basis.”