As bond defaults become an accepted norm in China, Beijing is shifting its focus to what happens next. China’s regulators are pushing to improve the debt restructuring process, currently notoriously opaque and protracted, Bloomberg News reported. Senior officials from bodies including the central bank and securities regulator this week urged that defaults be handled more efficiently and transparently, saying action is needed to restore investor confidence.

China’s central bank moved another step toward interest-rate liberalization by asking banks to price outstanding loans with new benchmark rates that are seen as more responsive to market movements, The Wall Street Journal reported. The People’s Bank of China said Saturday that commercial banks in the country should start replacing old benchmark lending rates with the Loan Prime Rate in pricing the loans issued before Jan. 1, 2020. The move will effectively scrap the old benchmark lending rates.

The former head of a regional bank rescued by Chinese authorities this year is set to spend the rest of his life behind bars after a court convicted him of corruption and other crimes on Thursday, the Financial Times reported. Jiang Xiyun, former chairman of Hengfeng Bank, was sentenced to death with a two-year reprieve — a punishment usually commuted to life in prison after the reprieve — by a court in eastern Shandong province, where the troubled financial institution is based.

China’s policy makers will unveil a three-year action plan in early 2020 on the reform of state enterprises, with an aim to improve the performance of the sector and create world-class champions, according to state-owned newspapers, Bloomberg News reported. The plan will tighten how the performances of state firms, often referred to as SOEs, are evaluated, and also seek “new breakthroughs” in introducing more strategic private-sector investors, Hao Peng, head of the country’s state assets manager, was cited in the China Securities Journal as saying.

China has a mounting debt problem. Not just over-leveraged companies, but a rapid build-up on household balance sheets that is hitting records. You can blame youth for a borrowing binge that, if left unchecked, could be China’s next credit bubble, a Bloomberg View reported. Household debt hit levels of 57% of gross domestic product in the third quarter, according to Bloomberg Intelligence analyst Matthew Phan, more than double just 27% in 2010. Fitch Ratings said in July that it was surging at a pace roughly double nominal GDP growth.

In a related story, the Financial Times reported that corporate defaults in China surged to a record high in 2019, raising new questions over how policymakers in Beijing will manage mounting financial distress among large private and state-owned companies. Onshore corporate defaults hit Rmb130bn ($18.6bn) in the final weeks of the year, breaking the record of Rmb122bn last year, according to data compiled by Bloomberg, as economic growth fell to a three-decade low.

China’s financial regulators are calling for more transparent and fair handling of defaults to restore investor confidence in the world’s second-largest bond market, after repayment failures hit a record high this year, Bloomberg News reported. Senior officials from the central bank, the securities regulatory body, the supreme court and other departments discussed court-mediated dispute resolution concerning bond defaults at a symposium in Beijing on Tuesday, according to a statement posted on the website of People’s Bank of China.

Troubled Chinese conglomerate HNA Group Co. faces a crucial test -- avoiding its first public bond default. Once a front-runner in China’s debt-fueled global spending spree, HNA is scheduled to repay a 1.3 billion yuan ($185 million) local bond Tuesday, Bloomberg News reported. Earlier this month, HNA said it would halt trading of this bond from Dec. 6 till its maturity due to an unspecified “major event that has yet to be finalized”. It didn’t give any details. The suspended bond last traded at 97.55 yuan on Dec. 5.

These are perilous times for holders of Chinese corporate bonds. Record domestic defaults and the biggest dollar-debt delinquency by a state-owned company in two decades have jolted investors this year, underscoring the need for increased vigilance as the economy slows and Chinese policy makers scale back support for a slew of cash-strapped businesses, Bloomberg News reported. As bondholders adjust to a new -- and arguably more healthy -- environment where companies are allowed to default, these are some of the indicators they’re watching to avoid getting burned.

China’s economy started the decade in a boom and will end it suffering the worst slowdown since the early 1990s, Bloomberg News reported. What comes next? Bloomberg asked some of the world's most prominent China watchers, several of which distinguished themselves over the past 10 years with prescient forecasts or market-beating returns. Predictions of even slower economic growth were near unanimous among the group, though most respondents also said policy makers have the tools to avoid a crisis.