China's local government debts should be the real worry

Beijing can cope with coming credit crunch if it loosens grip on markets

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20201217 Tsinghua Unigroup stand.jpg

Tsinghua Unigroup, a chipmaker backed by Tsinghua University, has faced investor skepticism over its finances for more than a year. © AP

Diana Choyleva is chief economist of Enodo Economics, a macroeconomic and political forecasting company in London.

Many fortunes and reputations have been lost down the years predicting trouble ahead for China, but this time really could be different: The tremors rocking the country's bond markets risk swelling into a shock wave of defaults with the potential to destabilize the economy.

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