China just let part of a state-owned company default for the first time ever
REUTERS/Jason Lee
The company is owned by Baoding Tianwei Group, a larger power company.
The subsidiary had bond interest payments to make Tuesday but could not raise the funds to meet them.
The default will likely raise fears that China will allow other state-owned companies to default - which may have accessed cheaper credit on the assumption that they had the implicit support and backing of Beijing. If investors start to think that isn't true, there could be turmoil in the country's bond markets.
On Monday there was another default, of Kaisa, a real estate developer listed on the Hong Kong stock exchange. It was the first time that a developer had been unable to pay interest on dollar-denominated bonds.
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