Provincial bond issuance could revive Chinese CDS market

China's CDS market has been languishing in the shadow of state protection – will the rising provincial bond market change this?

Nanjing, capital of Jiangsu, the first province to issue bonds

A new initiative to allow provinces and cities to sell bonds could stimulate the Chinese credit default swap (CDS) sector but uncertainty over whether Beijing would ever let these structures default raises questions about whether the cost of protection is justified.

China's CDS market has been languishing ever since it was launched by the National Association of Financial Market Institutional Investors (Nafmii) five years ago, largely because of an inflexible market structure that limits its

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