What if a Chinese province openly defaults despite Beijing?
A Chinese province openly defaulting despite Beijing is the LGFV tail finally biting — the trade is short copper and China-cyclicals as the implicit-guarantee assumption breaks. Directly rhymes with the 2021 Kaisa/Evergrande developer contagion, which repriced all Chinese credit on guarantee doubt. China is ~55% of copper demand and the marginal industrial buyer; the forward, novel angle is that an explicit LGFV default — unlike a private developer — shatters the moral-hazard backstop the whole onshore market rests on, so the credit-repricing could be broader than the property analogue.
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The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (electric blue) over time vs the market's (Polymarket, amber), from the past toward the 0–6 months horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. Loading the probability audit trail…
What it would mean
If this plays out, it is a risk-off shock. A debt-laden Chinese province openly defaults on financing-vehicle bonds despite Beijing. The trigger decomposes into signed root‑shocks — China growth ▼ · Credit spreads ▲ · Risk appetite ▼ — which propagate through our causal graph to the markets below.