(Adds Evergrande’s onshore coupon payment, other details) HONG KONG/SHANGHAI, Oct 19 (Reuters) - China Evergrande Group has paid an onshore bond coupon due on Tuesday, four people with knowledge of the matter said, amid concerns about a possible offshore default by the cash-strapped developer later this week. Hengda Real Estate Group Co, Evergrande’s flagship unit, has remitted funds to pay an onshore bond coupon of 121.8 million yuan ($19 million), the people said. One of the people said Evergrande, China’s No. 2 developer, needs to prioritises its limited funds towards domestic market where the stakes are much higher for the country’s financial system. The liquidity crisis at Evergrande, which has $300 billion in debt and has missed a series in bond payments, has roiled global markets. High-yield bonds issued by Chinese property developers have been especially hammered. An Evergrande bond due March 23, 2022 will officially be in default if the company does not make good after a 30-day grace period for a missed coupon payment that had been due on Sept. 23. But the offshore bond market has responded positively after China central bank’s assuring comment and coupon payments of two major developers. An index of China high-yield debt, which is dominated by property developer issuers, has seen spreads tighten from last week’s record levels to around 1,484 points on Tuesday. Sunac China, which has a $27.14 million payment due Tuesday, has paid its bondholders, a source with direct knowledge of the matter said. The source was not authorised to speak to media and declined to be identified. A Sunac representative declined to comment. Kaisa Group said on Monday it has paid a coupon due Oct. 16 and it plans to transfer funds for a coupon worth $35.85 million due Oct. 22 on Thursday. In the past few days, the People’s Bank of China has said spillover effects on the banking system from Evergrande’s debt problems were controllable and that China’s economy was “doing well”. Bonds from Chinese developers that gained on Tuesday included Modern Land’s 2022 bonds which bounced over 8% to 40.250 cents on the dollar, while Central China Real Estate’s 2024 bonds climbed over 5% to 44.843 cents. On Monday, smaller developer Sinic Holdings defaulted on $246 million in bonds as expected. It had warned of the default last week, saying it did not have sufficient financial resources. (Reporting by Clare Jim in Hong Kong, Samuel Shen in Shanghai, Shanghai newsroom and Beijing newsroom; Editing by Edwina Gibbs and Lincoln Feast)