Was Tsinghua Unigroup's bond default a surprise?

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.