As expected, China continues its systemic push towards tighter credit and economic restructuring away from construction. This time it’s wealth management products, an old favourite for developers to raise cash:
- Highly rated WMP will be prevented from buying junk debt from developers.
- This addresses the underlying duration mismatch.
- $400bn in junk debt will need to be refinanced imminently.
Meanwhile, China’s largest ponzi-developer, Evergrande, can’t catch a break:
