“The number of defaults on Chinese domestic corporate bonds has reached its highest level since the beginning of the year, adding to worries in the second-largest debt market in the world. Borrowers failed to make payments totaling 7.5 billion yuan ($1 billion) in June and July, marking the worst two-month period since last year. The stress score on Bloomberg’s China Credit Tracker remains high at 4 due to this situation. The pressure may rise further as more companies in the real estate sector struggle with declining sales of new homes. Additionally, officials are closely monitoring the debts of local governments, which the top decision-making body of the Communist Party of China pledged to address. Recently, it was revealed that municipalities will be allowed to raise approximately 1 trillion yuan to resolve the debt of local financial institutions and other off-balance sheet issuers.”