Causes And Risk Prevention Of Corporate Bond Default In China

China's capital market has developed rapidly in recent years.The variety of trading products has been continuously improved,and the scale of financing has been continuously expanded to meet the capital needs of different enterprises in a more diversified way.As of 2014,there has been no bond default phenomenon in China's bond market,which is attributed to the fact that the government and banks have been beating around the bush in China's bond market.This phenomenon tends to make investors ignore the credit risk of the bond market and is not conducive to the long-term development of the bond market.In recent years,China's economy has been in a downward trend.The pressure of the general environment has limited the development of enterprises,especially those enterprises with excess capacity and strong cycle have begun to focus on the occurrence of substantial bond defaults.Since the "rigid payment" was broken in 2014,the number and amount of bond defaults in China have been increasing day by day,and the scope of subjects involved has gradually expanded.In 2018,the number and amount of bond defaults in China reached the highest over the years.Therefore,this paper attempts to promote reflection on the current situation of bond financing entities through reflection on typical bond default cases,strengthen the control of corporate default risks,provide some reference for the construction of a healthy and orderly bond market,enhance the regulatory effectiveness of the industry,and promote the sustainable development of the industry.This paper chooses Dandong Port Group Co.,Ltd.,a typical private bond default enterprise in 2017,as a case study,uses case analysis method to explore the underlying causes and economic consequences of bond default,and puts forward relevant improvement measures,with a view to providing reference for other enterprises to issue bonds.Firstly,this paper gives a brief overview of Dandong Port Group,and combs the process of the outbreak of bond default in Dandong Port Group.Secondly,it analyses the internal operation risk,financial risk and external potential causes of the enterprise.Due to the external macro-environment,the industry is depressed,the pressure of port competition is great,and radical debt expansion strategy is adopted within the enterprise,resulting in excessive debt ratio,increasing the risk of enterprise debt repayment,and poor management of its own liquidity.All these factors are combined to cause the outbreak of Dandong Port Group debt default.The ultimate economic consequence is the collapse of Dandong Port Group's operation and management,the ruin of enterprise refinancing opportunities,and the adverse impact on the development of China's bond market.Finally,in view of the bond market,credit rating agencies and bond issuers,this paper puts forward some suggestions on how to strengthen the control of credit risk.Through the analysis of Dandong Port bond default cases,this paper draws the following conclusions: Firstly,the failure of company's strategic decision-making and the deterioration of business conditions are the fundamental reasons for bond default;secondly,the negative events of Dandong Port Group's actual controllers accelerate the outbreak of debt default events;thirdly,Dandong Port Group should attach importance to the company's sustainability;lastly,the default events.It shows that it is extremely important to improve the bond market mechanism.