It’s becoming clearer which parts of China’s corporate sector are most at risk of credit-market stress as Beijing pulls back liquidity: property firms, local government financing vehicles and energy producers, Bloomberg News reported. Developers account for a fifth of the $10 billion worth of delinquencies in China this year, while some concern is growing over local state-linked firms after one based in Chongqing missed payments on commercial bills. Coal companies in the country’s northeast are struggling to refinance in the wake of a shock default by a state-owned firm late last year. Beijing is walking a tightrope of allowing struggling companies to default while trying to avoid stress spilling over into the broader credit market. The Communist Party is making the reduction of financial risk a priority this year as a strengthening economy gives officials room to tackle the nation’s debt mountain. So far its efforts seem to be working: a key indicator of risk appetite in the broader market has remained robust despite rising delinquencies. Borrowers have defaulted on some $10 billion of bonds in China’s onshore and offshore credit markets so far in 2021, the highest on record compared to the same period in previous years, Bloomberg-compiled data shows. Read more.