Some $1.3tn in Chinese corporate loans — equivalent to the size of the entire Australian economy — is “at risk” of turning bad, according to the International Monetary Fund. But you would never guess that anything was even slightly amiss in corporate China if you were to consult the country’s homegrown credit rating agencies.

Everything is just fine, say the top-10 Chinese credit rating agencies. They have awarded an investment grade rating to 99.5 per cent of all rated publicly-issued debt outstanding (see first chart), according to data compiled by Wind Information, a data provider.

This sends a signal to investors that all but a tiny number of the Rmb13.2tn ($2tn) in rated enterprise bonds, corporate bonds, medium-term notes and commercial paper are safe to hold — in spite of the surge in corporate defaults so far this year to triple the levels seen in the whole of 2015. A total of 17 bonds have defaulted so far this year, compared with six in 2015.