Subscribe free to our newsletters via your
. Earth Science News .

Some debt defaults 'healthy' for China market: central bank
by Staff Writers
Shanghai (AFP) March 23, 2014

China's central bank hinted Sunday that it was willing to accept some debt defaults in the $1.8 trillion wealth management market, as the world's second-largest economy struggles to curb bad debts that pose a risk to the financial system.

"Under the premise of preventing systematic risks, allowing some default cases to happen naturally in compliance with market forces will... help rectify behaviours of product issuers and investors and benefit the healthy development of the wealth management market," People's Bank of China deputy governor Pan Gongsheng said at a forum in Shanghai.

Pan's remarks echoed those by Premier Li Keqiang earlier this month after the country's first-ever default on a domestic corporate bond sparked concerns that other firms could follow suit.

Li said authorities "pay very high attention" to financial and debt risks, but certain individual cases of such defaults were "hardly avoidable".

China's wealth management product market ballooned to 11 trillion yuan ($1.8 trillion) in early 2014 from two trillion yuan in 2011, Pan said.

"Guaranteed repayment... although it will ensure short-term stability, won't help the market to effectively differentiate risks and will eventually lead to accumulated risks," he said.

In early March, Shanghai-based Chaori Solar Energy Science & Technology Co said it was unable to make bond interest payments of 89.8 million yuan, sending it into a landmark default.

Earlier this year, the domestic financial market was gripped by worries over other financial products issued by trust companies, which have drawn comparisons to the American "junk bonds" of the 1980s.

Authorities have in the past intervened to avoid default risks but are now more willing to accept such incidents, which may ultimately benefit the market by raising awareness of risk and making investors more selective, analysts have said.


Related Links
The Economy

Comment on this article via your Facebook, Yahoo, AOL, Hotmail login.

Share this article via these popular social media networks DiggDigg RedditReddit GoogleGoogle

Memory Foam Mattress Review
Newsletters :: SpaceDaily :: SpaceWar :: TerraDaily :: Energy Daily
XML Feeds :: Space News :: Earth News :: War News :: Solar Energy News

China's politically-sensitive yuan falls after reform
Shanghai (AFP) March 17, 2014
China's yuan weakened against the dollar on Monday after the central bank doubled the trading band for the currency, which the United States has long insisted is undervalued. The People's Bank of China (PBoC) said Saturday it would allow the yuan to move up or down two percent daily - double the previous one percent - on either side of a mid-point set under the guidance of the bank, which ... read more

Safety lapses rapped after US nuclear plant fire

Contaminated Fukushima water may be dumped as problems mount

Fukushima: three years on and still a long road ahead

31 dead, nine missing in China lorry blast

Novel membrane reveals water molecules will bounce off a liquid surface

3D X-ray Film: Rapid Movements in Real Time

In the lab, scientists coax E. coli to resist radiation damage

Heat-Based Technique Offers New Way to Measure Microscopic Particles

Dolphin pod dies trapped in ice off Canadian coast

Water-rich gem points to vast 'oceans' beneath the Earth

N.African dust stimulates monsoons: study

Global powers sign declaration on sustainable fishing

Regional warming triggers sustained mass loss in Northeast Greenland ice sheet

Antarctic moss returns to life after 1,500 years frozen

Melting away: vanishing ice warning for 'Africa's Alps'

Global warming a concern at Chile's penguin paradise

Declining ocean health threatens food security

Plant biology discovery furthers scientists' understanding of plant growth and development

Success of new bug-fighting approach may vary from field to field

Tropical grassy ecosystems under threat

Torrential rains kill 32 in South Africa in two weeks

Pre-dawn quake jolts jittery Los Angeles

Strong 6.3-magnitude quake hits off Japan, injures 17

Floods kill 7 in Saudi Arabia: media

French kill jihadist commander in Mali

What sculpted Africa's margin?

South Sudan intercepts 'mislabelled' UN weapons shipment

Up to 12 'terrorists' in Mali killed by French forces

Stirring the simmering 'designer baby' pot

Empathy chimpanzees offer is key to understanding human engagement

Natural selection has altered the appearance of Europeans over the past 5,000 years

'Seeing' bodies with sound (no sight required)

The content herein, unless otherwise known to be public domain, are Copyright 1995-2014 - Space Media Network. All websites are published in Australia and are solely subject to Australian law and governed by Fair Use principals for news reporting and research purposes. AFP, UPI and IANS news wire stories are copyright Agence France-Presse, United Press International and Indo-Asia News Service. ESA news reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement, agreement or approval of any opinions, statements or information provided by Space Media Network on any Web page published or hosted by Space Media Network. Privacy Statement All images and articles appearing on Space Media Network have been edited or digitally altered in some way. Any requests to remove copyright material will be acted upon in a timely and appropriate manner. Any attempt to extort money from Space Media Network will be ignored and reported to Australian Law Enforcement Agencies as a potential case of financial fraud involving the use of a telephonic carriage device or postal service.