Zambia is already restructuring, renegotiating or refinancing its extensive Chinese project finance debt, and Chinese companies are playing hardball, according to new research, CNBC reported. Southern Africa's third-largest economy is under pressure from an impending breakdown of its power supply and its inability to pay for electricity imports, and is staring down the barrel of further defaults on construction project financing and bond payments.

A port operator in northeastern China once at the center of U.N. sanctions on North Korea is finding itself in another storm, Bloomberg News reported. Dandong Port Group Co. has regained attention after a controversial court ruling in favor of a state-led debt overhaul that forces steep losses on creditors and drew shareholders’ complaints about an opaque bankruptcy process. The court verdict also runs counter to an unprecedented roadmap that Beijing has just laid out to restore investor confidence via fair handling of bond defaults.

China’s offshore corporate bond defaults rose to $3.6 billion in 2019, up from $3.3 billion the year before, according to data compiled by Bloomberg. Tewoo’s dollar bonds were restructured with some investors agreeing to be paid just 37 to 67 cents on the dollar, depending on the maturity of the debt, Bloomberg News reported. China Minsheng Investment Group’s $300 million bond was paid by a Chinese bank guarantor. The company unveiled a plan to repay its $500 million note in October.

Local government shell companies in China bought into struggling privately run listed firms for the first time last year, veering from their typical remit of financing infrastructure projects to pump over $2 billion into cash-strapped businesses, Reuters reported. Local government financing vehicles (LGFVs) acquired controlling or near-dominant stakes in 11 China-listed firms, showed Reuters calculations based on stock exchange filings. They also bought into a handful of small, capital-starved banks.

China’s record boom in debt issuance abroad in recent years has left a sour after-taste for bondholders: missed payments on billions of dollars worth of securities. In what’s now become a new normal for the $815 billion-plus Chinese offshore-debt market, at least seven borrowers defaulted in 2019, Bloomberg News reported. About $3.6 billion of bonds went into default last year, up from $3.3 billion the year before, according to data compiled by Bloomberg. The 2019 tally spanned a state-owned commodity trader to a onetime Coca-Cola Co. acquisition target.

When China’s bond issuers run into trouble, investors face an increasingly tough task in extracting any returns, the Financial Times reported. Bond defaults across the world’s second-biggest economy are rising, with more borrowers failing either to repay creditors’ initial investments, or make regular interest payments. Typically, some investors can find a way to hold on to so-called distressed debt and recover scraps of cash. Specialist investors also buy this debt on the cheap, in what can be a lucrative if risky strategy. Now, though, returns are shrinking.

A Chinese fertilizer maker is being watched closely after it became a rare state-owned company to initiate a court-led debt restructuring, that could result in losses for some of its onshore creditors, Bloomberg News reported. Qinghai Salt Lake Industry Co. is a state-owned firm located in sparsely-populated province in northwest China that mainly produces potash. A local court in the province threw a lifeline to Qinghai Salt Lake in September by accepting a creditor’s request to restructure the firm amid its financial troubles.

Chinese property developers kicked off the new year with a strong pipeline of bond issuance, in particular for long-tenor notes, taking advantage of easier regulatory approvals and robust market demand, Reuters reported. Analysts said there were signs of a slight loosening in granting quotas to developers with offshore refinancing needs, but cautioned that credit risks remained with property sales expected to be flat this year.

Hundreds of Chinese tech start-ups — including several unicorns — failed in 2019, with many more limping into the new year, as companies burned through cash in the face of growing financial headwinds, the Financial Times reported. According to new data from business information provider ITjuzi, 336 start-ups in the country were forced to cease operations over the course of last year, having collectively raised Rmb17.4bn ($2.5bn) from investors. Among them were companies valued individually at more than $1bn.

In a bond market where investors once received ham as interest payment, the challenge to rein in unruly borrowers is imaginably tough, Bloomberg News reported. That’s the daunting task Beijing faces now. In response to a surge in bond failures, Chinese regulators have taken unprecedented steps in recent weeks to restore investor confidence via more efficient and transparent handling of defaults.