The article explores how China's corporate bond market has grown to be the third largest in the world despite lacking formal institutions. The market's growth is due to a network of relationships among state-owned actors. This state-centric network may affect the market's ability to act as a 'spare tire' in times of financial stress. The market's structure and regulation have been influenced by regulatory competition. The network of relationships in the market ultimately leads back to the state, impacting bond pricing, rating, and default. Policy issues raised include regulatory competition, the bankruptcy system's role in handling financial distress, and the link between the corporate bond market and China's shadow banking system. The Chinese corporate bond market showcases both the achievements and limitations of state capitalism.