Since the beginning of the year, dozens of companies in China have delayed paying back bonded debt, totaling over 50 billion yuan (7.2 billion US dollars). These frequent defaults are severe, but a fresh report from Bloomberg predicts things will improve in the fourth quarter. 

In the third quarter of this year alone, 22 companies, mostly private and listed, defaulted on 48 bonds. 

"Some firms in traditional industries now need to upgrade their technology, so their operations are facing problems and may have difficulties paying back interest. The macro environment may be part of the reason, but the need for industrial upgrades is playing the more important role," said Yang Zhongning, investment consultant at Industrial Securities.

Things are expected to take a favorable turn in the coming months. A Bloomberg survey says half the financial institutions it has surveyed expect fewer debt defaults in the fourth quarter, while only 11 percent states the number of debt defaults will remain about the same. 

The Chinese government is putting extensive efforts in turning the tide.

"For example, the central bank has clearly instructed commercial banks to purchase corporate debts through medium-term loans. That means officials are prescribing just the right medicine for the patient, helping companies with large financial demands. In addition, the central bank, the State Council and the Big Four commercial banks have been holding symposiums to communicate with these private companies and help them with their financing," said Shao Yu, chief economist for Orient Securities.