ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon Print

Was Tsinghua Unigroup's bond default a surprise?

Chipmaker's strategic significance 'overrated' -- but its parent is different

Bailing out Tsinghua Unigroup is probably not a priority for the government of President Xi Jinping, an analyst says. (Nikkei montage/AP and Reuters)

HONG KONG -- Arguably the hottest topic in China at the moment is corporate bond defaults. Recent developments in the country seem to carry more significance than just a certain number of companies being unable to fulfill their repayment obligations on time, as the list includes notable state-owned enterprises that were deemed to be strategically important against the backdrop of an ongoing tech rivalry with the U.S.

A case in point is Tsinghua Unigroup, a tech conglomerate under the umbrella of Tsinghua University, the top Beijing school for science and engineering and the alma mater of President Xi Jinping. A default on a 1.3 billion yuan ($198 million) bond on Nov. 15 by the chipmaker was a powerful wake-up call to investors on China's corporate credit risks.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

Discover the all new Nikkei Asia app

  • Take your reading anywhere with offline reading functions
  • Never miss a story with breaking news alerts
  • Customize your reading experience

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more