http://www.marketwatch.com/story/china-government-firms-default-s...

http://www.marketwatch.com/story/ch...ault-shocks-market-is-more-to-come-2015-04-22

China government firm’s default shocks market — Is more to come?
By Laura He
Published: Apr 23, 2015 2:30 a.m. ET

HONG KONG (MarketWatch) — Chinese power-equipment maker Baoding Tianwei Group made history this week, becoming the first-ever Chinese government-owned company to default on its debt.
The news came just one day after another milestone, in which Kaisa Group Holdings 1638, -1.89%   became the first Chinese real-estate developer to default on a U.S.-dollar-denominated bond. But it was the Tianwei case that holds far greater implications for Chinese markets: State-owned enterprises (SOEs) such as Tianwei are traditionally seen as enjoying implicit government support and therefore possess lower default risks.
The news has stoked concerns about rising credit risk in the country, with analysts now warning of more defaults to come, and even the likelihood of a major credit crunch.
Landmark event
In a report Tuesday, China’s largest investment bank — China International Capital Corp. (CICC) — described Tianwei’s default as a “landmark” in the history of the nation’s bond market, although the 85.5 million yuan ($14 million) bond interest payment it has missed is relatively small in size.
Failure to repay public debt was once practically unknown in China, but that changed last year, when Shanghai Chaori Solar Energy became the first Chinese firm to default on a corporate bond. But although the market has now had time to get used to the idea of Chinese defaults, and although Tianwei’s financial difficulties had been widely reported even back before Chaori defaulted, its inability to honor its bonds has surprised the market, CICC said.

This is why there is not meant to be any shadow banking/debt guarantees involving Sunbridges subs in China. That one issue was of even greater concern to me than no dividend as I thought what's the limit to this and we get told sweet fa? It reduced in time for the full year but could just as easily be back up now we just don't know and it needs to be addressed IMHO - No more unrelated third party debt guarantees full stop..