Local Gov'ts Won't Always Back Bonds, CSRC Warns

(Beijing) – The China Securities Regulatory Commission (CRSC) has warned investors not to think local governments will bail out troubled companies to keep China's bond history clear of default.

The warning came less than two months after small and medium-sized enterprises were allowed to issue bonds on the Shanghai and Shenzhen stock exchanges through private placement. These bonds are called high-yield bonds or junk bonds because they promise high returns but carry significant risks.