A looming bond default by Shanghai Chaori Solar Energy Science & Technology Co may raise concerns about conditions in China's onshore bond market, although it also implies government confidence about letting companies fail, analysts said.

The panel producer said in a statement to the Shenzhen Stock Exchange on Tuesday night that it can't make the full 89.8 million yuan ($14.7 million) in interest payments due on Friday on its "11 Chaori Bond". It can only pay 4 million yuan, it said.

Chaori's failure to pay interest will mark the first default of an onshore bond.