(Read more: China allows first corp bond default)
That's the good news.
The bad news is if you're a company teetering on the brink of a similar default, it would be wise not to expect the government or a big bank to come rushing to your rescue.
"The previous bailouts in the Chinese onshore bond market created moral hazards and encouraged investors to seek the highest yields while overlooking the credit risks," Chung said. "The default will galvanize investors and regulators to pursue the needed reforms."
Analysts expect the Shanghai Chaori default to be a test case that, absent any major contagion, will lead to higher borrowing costs and still more defaults.
(Read more: We see 'less and less cash' in system: Soho China CEO)
Standard & Poor's analysts in Hong Kong called the default a "transformative event" for China's bond market that nevertheless probably won't pose systemic credit risks.
"We believe this landmark event will make lenders and investors more disciplined, and it will likely lead to higher funding costs and tighter refinancing conditions for low-quality corporates," S&P credit analyst Christopher Lee said in a statement.
The firm said it believes China's government "is beginning to address the difficult moral hazard and implicit state guarantee of financially weak and commercially unviable borrowers."
China's nearly $14 trillion corporate debt market is a minefield often filled with overpriced securities for companies that reap the benefits of having implicit government guarantees.
(Read more: Why China needs a national property tax)
From an investor standpoint, though, changing the stance toward bailouts offers the opportunity of a more stable system in the long term as China seeks to gain greater acceptance in the global community.
"We see onshore corporate credit defaults as a long-term positive for China's financial system as it should instill greater market discipline and lead to a more efficient allocation of capital among corporate borrowers," the Fitch ratings agency said in a statement. "It may also prompt further regulatory progress to provide more clarity on the legal process governing domestic bankruptcies and restructuring, which should benefit both onshore and offshore creditors in the long run."
More precisely, the reforms could invite other investors into the market who would be scared off otherwise.
"They want to free up interest rates. They want to let new players into the market," Richard Martin, managing director of IMA Asia, told CNBC.
"This means market pricing of capital, and a default on a badly managed bond is part of that. I think they can let this one go and we might see one or two a month as we go from here, and then we'll see better pricing of the bonds."
—By CNBC's Jeff Cox. Follow him on Twitter