China’s central bank remains on course to taper its emergency support even as a string of defaults by government-linked companies sends tremors through the credit markets. Officials have been preparing investors about the possibility of withdrawing some of that stimulus as the economic recovery picks up pace, Bloomberg News reported. While a surge in market interest rates this week following the defaults appears to have complicated that plan, economists say it won’t push the People’s Bank of China off its policy course.

China widened its probe into last week’s shock bond default by a state-owned coal miner, saying on Thursday that three underwriting banks were suspected of misbehavior, Reuters reported. China’s interbank bond market regulator said in a statement it will launch investigations into Industrial Bank Co , China Everbright Bank and Zhongyuan Bank Co, which helped Yongcheng Coal & Electricity Holding Group issue bonds.

As Beijing reins in its largesse and credit stresses rise in China amid a wave of defaults, investors should wonder where the ructions will appear next, Bloomberg News reported in a commentary. Going by the numbers, local government financing vehicles – with trillions of yuan outstanding – seem primed to come under pressure. Their debt is meant to help raise capital for infrastructure and other public projects. Issuance in the first seven months of the year totaled 2.5 trillion yuan ($381 billion), up 32% over the same period in 2019.

Tsinghua Unigroup, a major government-backed player in China’s technology race, has defaulted on a 1.3-billion-yuan ($197.96 million) bond, three sources said, as several high-profile delinquencies by state firms rattled the country’s bond market, Reuters reported. The default by Tsinghua Unigroup, a wholly-owned division of the prestigious Tsinghua University in Beijing, on Monday immediately triggered a credit rating downgrade that is expected to weaken the company’s financial health.

A new framework to resolve debt crises in developing countries, meant to ensure that Chinese and private creditors share the burden of providing relief, faces a key test after Zambia became the first African nation to default during the coronavirus pandemic, The Wall Street Journal reported. Finance ministers from the Group of 20 major economies said Nov.

German carmaker BMW said on Tuesday there was no indication that its deal to increase its stake in its joint venture with Brilliance China Automotive would be affected by debt issues at Brilliance's parent, Reuters reported. BMW said in 2018 that it would pay 3.6 billion euros ($4.2 billion) in 2022 for a further 25% stake in the venture with Brilliance - its main joint venture in China - adding to its existing 50% holding and giving it control of BMW Brilliance Automotive (BBA).

A series of unwelcome surprises in China’s huge corporate-bond market has knocked investors’ confidence in the local governments that stand behind many issuers, The Wall Street Journal reported. In one high-profile example, Yongcheng Coal & Electricity Holding Group Co. shocked investors last Tuesday by failing to repay a maturing short-term bond worth 1 billion yuan, or the equivalent of $151 million.

China’s central bank injected more than $120 billion yuan into the country’s banking system on Monday in a move to soothe rattled nerves after a series of debt shocks involving state-owned enterprises (SOEs) led to a bond selloff last week, Reuters reported.

Chinese banks and fund managers dumped their holdings of riskier corporate bonds on Friday after a series of defaults by top-rated state-owned enterprises (SOEs) sent shockwaves through the mainland corporate bond market, Reuters reported. As lower-rated bond yields rose, analysts speculated the defaults suggested authorities were going back to cleaning up excessive debt build-up in an economy emerging from the coronavirus pandemic. A Chinese miner that defaulted this week meanwhile canceled Friday’s investor meeting for fear it would turn chaotic after too many creditors showed up.

A smattering of high-profile Chinese debt defaults this week may give bullish foreign investors pause and likely dampen the debt sales outlook, bankers and analysts said, as a bond market selloff revived worries about flaky government support, Reuters reported. State-owned miner Yongcheng Coal and Electricity Holding Group surprised investors and sparked a regulatory probe by defaulting this week on debt obligations just three weeks after it raised a billion yuan ($151 million).