China Top Fin'l Authority Orders Severe Punishment for Debt Evasion

Chinese regulators must maintain order in debt markets with a "zero tolerance" approach and severely punish those who evade debt, issue debt with fraudulent information, misappropriate assets or misuse the capital raised, according to a statement following a meeting of the Financial Stability and Development Committee. A statement from the committee, chaired by Vice Premier Liu He, was posted on the government website and addressed the recent increase in bond defaults, attributing them to "cyclical, systemic and behavioral factors". Regulators must observe laws and implement accountability, said the committee. The meeting is the highest-level government response so far following bond market turbulence this month after high-profile defaults by companies including Yongcheng Coal and Electricity Group, a company owned by the central Henan government.