A whiff of 2008 is suddenly turning heads toward China as an AAA-rated state-owned coal mining company defaults.

We’re not necessarily talking about a Lehman Brothers-like disaster that sends ripples of contagion around the globe. And at US$151 million, we’re certainly not talking about a systemically-threatening amount in missed payments.

But the troubles at Yongcheng Coal and Electricity Holding Group are emblematic of where the second-biggest economy finds itself heading into 2021.

It’s a stark reminder that underneath China’s bullish macro narrative lies a shaky microeconomic foundation in need of urgent reinforcement.