China’s effort to combat “chaos” in its financial system is taking a heavy toll on the ability of highly-leveraged non-financial companies to raise money by issuing bonds, according to new data.
A government drive to squeeze financial companies’ liquidity and guide interbank rates higher has had a punitive impact on other groups, which have rushed to abort planned debt issues, according to Wind, a Chinese data provider. In April, the number of aborted issues rose to 154, up from 94 in March, 32 in February and 31 in January.
These signs of mounting stress in China’s $9.3tn bond market come after Guo Shuqing, the country’s banking regulator, was quoted as supporting a campaign to sort out chaotic practices, threatening to resign if the banking system became “a complete mess”.