Why China’s debt defaults are good for investors

Investors rarely see a rise in bond defaults as a good thing. But in China’s case, an exception can be made. The news that Yongcheng Coal and Electricity Holding Company and technology company Tsinghua Unigroup – both regional government-owned borrowers – had defaulted on bond payments during November has served to undercut investor assumptions about the willingness of Beijing to stand behind every state-linked debtor. They are not the first state-linked borrowers to default – F…