Proposed mart for bonds in default may become reality 'soon'

China needs to open a special market for trading bonds in default. The proposed measure can help inject funds into the corporate financing market and tackle any heightened corporate credit risks. A complex mechanism for the purpose is under discussion, an expert told China Daily.

A policy framework of the trading mechanism has been designed and submitted to the country's top financial regulators. A draft is likely within the year as the suggested rules have won applause from the authorities concerned, said Li Shuguang, director of the Bankruptcy Law and Restructuring Research Center, which operates under the aegis of the China University of Political Science and Law.

Pan Gongsheng, a deputy governor of the People's Bank of China, confirmed on July 3 that the country will "soon introduce a trading mechanism for bonds in default".