Trade war creates credit stress for Chinese manufacturers

Defaults start to pick up as smaller entities struggle for orders and financing.
The world’s factory is in trouble. While China held onto its title as the world’s largest manufacturer in 2018, the Sino-US trade war took its toll on its companies’ balance sheets, leading to a marked pick-up in defaults so far this year. 
 
This trade-induced credit stress has been further compounded by the fact that so many Chinese manufacturers are small and medium private sector entities, which struggle to obtain financing from a banking sector that prioritizes companies with explicit or implicit government guarantees.
 
Christopher So, a partner of PwC’s Hong Kong restructuring and insolvency practice, told Finance...
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