Market Views: Are China bond defaults a systemic risk?

Chinese corporate bonds, particularly those denominated in US dollars, have seen an increase in defaults, raising the spectre of a broader systemic collapse if these continue to pile up. From zero defaults in 2017, Chinese offshore corporate dollar bond (OCDB) defaults totalled some $3.4 billion in the first 10 months of 2018, according to research from Japanese bank Nomura. A weakening Chinese currency is one major factor behind that rise, as it's made it more expensive for ren…