China Reshapes $12 Trillion Credit Market

The video discusses the unprecedented stress in China's credit markets, focusing on major borrowers like Huarong and Evergrande. It highlights Beijing's campaign to reduce moral hazard by allowing defaults while maintaining financial stability. The delicate balance Beijing must maintain to manage contagion risks and encourage market maturity is also explored.

In what ways might defaults in the credit market be seen as necessary?

What has been Beijing's approach to managing contagion risks in the credit markets?