Last week a failure by Shanghai Chaori Solar Energy to meet interest payments on its debt became China’s first onshore corporate bond default, prompting some alarmed and alarming talk about a wave of defaults across China, Forbes reported. The phrase ‘Bear Stearns moment’ was used (by Bank of America Merrill Lynch among others), suggesting, presumably, that one default would cause investors to take flight from the entire Chinese corporate debt market and so cause a run on the whole sector, leading to a major crash.

The world’s most-profitable banks have never been so unloved by stock investors, Bloomberg News reported. China’s four-biggest lenders, which reported $126 billion of earnings in the 12 months through September, sank to the lowest valuations on record in Hong Kong trading yesterday. The MSCI China Financials Index dropped to an almost decade low versus the global industry benchmark while the market value of Industrial & Commercial Bank of China Ltd., the nation’s largest lender, fell below net assets for the first time on March 12.

China's central bank is prepared to take its strongest action since 2012 to loosen monetary policy if economic growth slows further, by cutting the amount of cash that banks must keep as reserves, sources involved in internal policy discussions say, Reuters reported. A cut would be triggered if growth slips below 7.5 percent and towards 7.0 percent, they said, and would come on top of money market operations and currency intervention via state banks that traders say has already loosened monetary conditions.

The Shanghai government has approved a city-owned investment company to buy non-performing loans from local banks, state media reported on Friday, becoming the latest Chinese local government bracing for an expected rise in bad debt, Reuters reported. Shanghai's launch of a dedicated "bad loan bank" follows similar moves by the wealthy eastern provinces of Jiangsu and Zhejiang. Analysts expect a rise in bad loans in the coming years as China's economy slows, with loans to local governments and industries suffering from overcapacity a key source of concern.

China’s leaders spurred speculation they will allow the country’s $21 trillion debt mountain to inflate after refraining from cutting their annual economic-growth target, Bloomberg News reported. Analysts at Australia & New Zealand Banking Group Ltd. and Nomura Holdings Inc. said authorities will need to loosen monetary policy, after Premier Li Keqiang yesterday announced a goal of 7.5 percent growth, the same target as last year. Li said China will seek an “appropriate” increase in credit.

China’s property trusts, grappling with repayments equivalent to the size of Puerto Rico’s economy, face rising default risks as a former central bank adviser dubs real estate the biggest threat to the economy, Bloomberg News reported. The trust funds must repay 634 billion yuan ($103 billion) of debt this year, up 50 percent from 2013, according to estimates from Haitong Securities Co., the nation’s second-biggest brokerage. The yield on the 2014 notes of Myhome Real Estate Development Group Co., based in the central city of Wuhan, jumped 185 basis points in the past year to 7.78 percent.

Zhang Hongbao, who’s run a funeral home in Shanghai for more than a decade, says he can’t recall the last time business was so dead, Bloomberg reported. “Government officials don’t dare to spend too much on funerals,” Zhang, owner of Shanghai Funeral Service (China) Co., said in an interview. “It’s the peak of the anti-corruption drive.

Suntech Power Holdings Corp., the Chinese solar-panel maker that defaulted on $541 million of bonds, filed for bankruptcy court protection from U.S. creditors as it liquidates in the Cayman Islands, Bloomberg News reported. The company filed its Chapter 15 petition late Friday in U.S. Bankruptcy Court in Manhattan as part of a restructuring agreement with petitioners seeking an involuntary filing last year. In November, Suntech told the court that the proposed action by U.S. creditors could derail restructuring efforts.

China’s central bank has drained Rmb48bn ($7.9bn) from money markets, an unexpected move that signals its concern with the boom in lending at the start of the year, the Financial Times reported. The People’s Bank of China withdrew the cash by issuing 14-day bond repurchase agreements. It was its first time using repos to drain liquidity from the money market in eight months. The central bank typically gauges demand from banks the day before conducting open-market operations, but on this occasion it issued the repos without advance warning, traders said.

China's Wanxiang Group won court approval Tuesday to take over failed luxury hybrid-car maker Fisker Automotive Inc. after successfully outbidding Hong Kong billionaire Richard Li in an auction, The Wall Street Journal reported. Mr. Li's takeover vehicle, Hybrid Tech Holdings, signaled it would move to collect most of the $149.2 million Wanxiang is paying, exercising its rights as Fisker's senior secured lender to trump the claims of Fisker's unpaid suppliers. Judge Kevin Gross approved the sale of Fisker's assets to Wanxiang at a hearing in the U.S.