As foreign investors sail into China's stock and bondmarkets, 2020 marked the edge of the map. Safeguards and backstops long taken for granted may no longer exist, and the market offers just as much danger as it does opportunity.
Those investing in China will know corporate scandal and collapse are not new. Take, for example, Kangmei Pharmaceutical. One of 2019's highest-profile cases, it was able to survive a $12bn accounting fraud through a combination of three factors: government support; lenient regulators; and a forgiving market. The company was able to retire debt rather than defaulting (thanks to government pressure on its creditors), was hit with a negligible fine ($84,000) and though the shareprice is down 92% from the peak, it remains listed. To many, Kangmei represents about the worst case scenar...
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