Concern about China's debt load is mounting, but there are signs that higher interest rates may finally be helping the country get to grips with the wasteful investment and excessive borrowing that has fueled the economy since the global financial crisis.
An official audit showing a big jump in Chinese government debt since 2010 caused some alarm last week, but in fact corporate debt may present an even bigger risk.
The audit showed that local and central government debt equaled 58 percent of gross domestic product last year, and most economists estimate that corporate debt is at least twice that level.
For now though, explosive debt growth appears to be slowing. At least 35 Chinese companies canceled or postponed previously planned bond sales totaling 59 billion yuan($9.75 billion) in the last two months, according to Reuters calculations based on public disclosures.
That's good news for an economy where debt from all sectors probably reached 218 percent of GDP at the end of 2013, according to rating agency Fitch, up 87 percentage points since 2009. Economists warn that similarly rapid run-ups have led to financial crises in other countries.
Higher interest rates are the main reason for the recent wave of bond issue postponements, with borrowing costs rising as China's central bank set about damming the flood of easy money and over-investment that had supported economic growth in the face of the global financial meltdown.
The benchmark yield on five-year AAA-rated medium-term notes reached a record-high 6.36 percent on Dec. 31, up from 4.51 percent in mid-May, according to data from the National Interbank Funding Center.
China's second-largest coal producer, China Coal Energy, planned to sell one billion yuan of 10-year medium-term notes on Dec. 24 but cancelled the sale at the last minute, saying the funds weren't necessary to fund vital investments.
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"We already issued some medium-term notes a while back, so we have enough money for the moment," said a woman at the board secretary's office of China Coal, who declined to give her name.
"We were originally approved to issue (a certain amount), and we thought it would be a pity not to use up the full amount. But if we don't issue right now, it won't have much of an impact on the company," she said.
This and similar statements by Dongfeng Motor and Inner Mongolia Junzheng Energy and Chemical Industry suggest the postponements may carry little cost to China's economy.