AMP Capital: Talk of a 'Bear Stearns moment' in China flowing from the interest payment default by a company that makes solar cells - the first corporate bond...

AMP Capital: Talk of a 'Bear Stearns moment' in China flowing from the interest payment default by a company that makes solar cells - the first corporate bond default in China - is way overdone. It seems everyone is on the lookout for such 'moments' in China right now. Yes, there is a risk of more defaults but the authorities are unlikely to allow a snowballing loss of confidence and the absence of layers of leverage. Complexity and financial linkages suggests the risks of it triggering a global financial crisis (GFC) style impact is low. In fact, allowing defaults to occur is long-term positive in allowing the Chinese corporate debt market to mature with a realistic risk pricing.