China’s recovery could bring more defaults to light, S&P says

Here’s a sign the Chinese economy is recovering from Covid-19 authorities appear willing to let state-owned enterprises SOEs default on their debt repayments.

A missed bond payment last week by a Chinese company that seemed to be a beneficiary of state support shows the government’s willingness to accept that defaults could be on the rise with an improving economy, according to SP Global Ratings.

The ratings agency was referring to Yongcheng Coal and Electricity Holding Group YMD, which last week missed a bond payment that could lead to a cross default by its parent, Henan Energy and Chemical Industry Group. SP, which doesn’t...