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China braces for more defaults among state firms in 2021 — and that could be a good thing – CNBC

Fitch Ratings said the number of defaults among Chinese state-owned enterprises could “rise marginally” in 2021 as funding conditions tighten.

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A Chinese national flag seen in front of Oriental Pearl Tower in Shanghai on September 8, 2019.
SINGAPORE Bond defaults by Chinese state-linked companies are set to continue into the new year, but analysts say that may be a good thing in the long run as “zombie” entities are weeded out.
Investors usually consider government-backed companies a safe bet given the “implicit guarantee” that Chinese authorities would save those that run into trouble. However, a string of defaults in recent weeks including…

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