“This is a problem facing every country because of the lockdown and downturn in the economy. Many businesses are facing cash flow problems. It is not unexpected that balance sheets will be somewhat impaired (during times like these). We have seen cases reported recently of bond defaults by China’s small state-owned enterprises, and even a big property company, Evergrande.
“The regulators are very much aware of this. They know they have to manage this. We don’t see a systemic crisis at all for China, but we do see some of the smaller banks to have problems because they are not well capitalised and need to be recapitalised. Overall, (the) authorities are aware of this and (have) tried to address this on a case-by-case basis.
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