Chinese corporates have issued two-thirds of Asian sub-investment grade bonds outside of Japan year-to-date, from less than half of the total in 2013. This trend is likely to continue with China’s share of Asia ex-Japan high-yield issuance set to rise for a fourth year in 2018. A key driver of the strong growth is investor demand, allowing the huge volumes of risky Chinese international debt to get done despite the increasing potential of concentration risk. Borrowers are also eager to tap this market amidst the backdrop of tight domestic funding and government initiatives to deleverage, both of which have been restricting corporate efforts to borrow onshore.

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