BEIJING - China's first default of an onshore corporate bond signals market progress as it dispells the "rigid honoring" delusion of many investors, chairman of the Shenzhen Stock Exchange Chen Dongzheng said on Sunday.

"Any financial product has its risks," stressed Chen, a member of the National Committee of the Chinese People's Political Consultative Conference, at a press conference.

His comments came after the Shenzhen-listed solar maker Shanghai Chaori Solar Energy Science & Technology Co announced days earlier that it has failed to fully service an 89.8 million yuan ($14.7 million) interest payment, widely described as China's first ever corporate bond default.

While the default may hurt sentiment in the bond market, analysts said the episode would help nurture a more market-oriented financial sector as the government has not stepped into the investors' rescue.

The case also came at a time when lawmakers and political advisors met in Beijing for the country's annual "two sessions" to discuss social and economic policies, during which authorities have repeated its pledge to allow market to play the "decisive role" in allocating resources in the economy.

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