China's economy is witnessing a major slowdown and Beijing is becoming more and more relaxed about witnessing a total failure. A large number of oversees bond holders are facing a problem due to the country's inconsistent court system, said reports.

Only last month, solar producer giant Baoding Tianwei Baobian Electric was reportedly named as China's first ever state owned company to sign a bond coupon payment, states Reuters.

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In additio to this, Kaisa Group also became the first ever Chinese property developer which failed to pay a coupon on its bonds (U.S dollar); Internet giant Cloud Live Tech Group also failed to repay almost $40 million to its bond holders, states Morning Star.

The Chinese courts are also showing a wide discretion to accept the bankruptcy filings and need to gear up and work closely with the government officials and the local tax revenue collectors. The foreign investors who recently experienced bankruptcy in China said that they were treated like total nonsense when they tried to approach the court for this matter.

The major reason for this extreme fallout is inconsistencies. Even if the foreign investors form only a small part of the domestic bond ownership in China, their number is expected to increase in the coming years as China is one of the largest corporate bond market in the entire world. This number is expected to increase to 3 to 4 percent till the end of this year.

The Chinese Bankruptcy law, which came in to effect in 2007, allows the defaulters to file bankruptcy and restructure their businesses. This law is still fresh and is in the process of evolving, making it difficult for the ongoing situation of bankruptcy to get resolved.

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