A Chinese state-backed technology group is the latest company to default on a domestic bond issue, denting Beijing’s ambitions to build a “self-reliant” semiconductor sector and further agitating the world’s second largest bond market.
Unigroup International Holdings said in a statement to the Hong Kong stock exchange that semiconductor company Tsinghua Unigroup “was not able to redeem” its Rmb1.3bn ($198m) bond due on November 16, triggering a default.
Tsinghua Unigroup, a national champion, is ultimately controlled by Beijing-based Tsinghua university, China’s most prestigious engineering school. The company has received tens of billions of dollars in government support as President Xi Jinping’s administration ramped up efforts to wean the domestic semiconductor sector off US technology.