Introduction

Contents

1. Market overview: China's treasury inflows lasted thanks only to index inclusion

2. BI research: Economic, social fallout cloud china internet credit Into 2023

3: Credit risk analysis: China's default rate could further improve in December

4. China's secondary bond market: Domestic bonds faced selloff in November

5. China primary bond market: Pearl-bond issuance has surged more than 10x this year

6. Appendix: Key functions and BI reports

7. Additional charts: Distressed securities and subscription trends

*Disclaimer

In this month's edition of China Market Insights, we share our credit outlook for China's internet industry into 2023 as Chinese consumers might shift their spending from non-essentials with the economy slowing. Our analysis shows China's internet issuers could face pressure on their free cash flows as capex and investment remain significant, but substantial cash buffers and solid financial flexibility will likely support the credit profile of investment-grade issuers. In our credit-risk section, we note China's dollar-bond market default rate could improve in December. While offshore trading volumes were slightly up in November, pearl-bond issuance has surged more than 10-fold this year. Refer to the appendix for our credit analyses of China junk bonds, electric-vehicle (EV) makers' credit risk, and other relevant BI reports on China. 

John Lee
Regional Market Analyst
Bloomberg Intelligence

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