Kaisa group holdings missed $52m payments and confirms defaults of bonds

It's been widely known that the company may default on these dollar bonds and the confirmation makes it the first Chinese developer to default on dollar bonds.

They owed a total of around $10.5bn to lenders as of the end of Dec 2014

The default could send some shivers down the backs of foreign investors but domestically this will have very little effect due to the large reserves that Chinese banks hold.

The bigger problem is that China keeps easing up on these reserve ratios in an attempt to stimulate the economy. In effect, if the cash freed up from the reserves are lent out it has the effect of going from a balance sheet plus to a minus, thus eroding the protection at double the speed.