China’s biggest banks and state-owned companies have been told to check their financial exposure to Fosun, the sprawling conglomerate that owns assets including the Premier League football club Wolverhampton Wanderers, as the heavily debt-laden group struggles from the impact of downturn in the property sector in its home market. The financial strength of the Shanghai-based group, co-founded in 1992 by the billionaire Guo Guangchang and built into one of China’s largest non-state-owned conglomerates, has come under scrutiny after a huge sell-off in property bonds that began in June. Dollar bonds…
Tag: Chinese economy
Evergrande lenders appoint receiver to seize Hong Kong HQ – sources
Lenders to the struggling Chinese developer Evergrande Group have appointed a receiver to seize its Hong Kong headquarters, two sources have said, as the world’s most indebted developer struggles to emerge from its debt crisis. Evergrande is saddled with more than $300bn (£260bn) in liabilities and has been kept alive by a government-run rescue operation since it defaulted on $22.7bn of overseas debts in December last year. It has been trying to sell its 26-storey China Evergrande Centre in Hong Kong’s Wan Chai district as part of its asset disposal…
China’s property market is in freefall. What does this mean for the world economy? | Keyu Jin
The property sector in the Chinese economy has always been something of a puzzle. At its peak, it accounted for a quarter of the nation’s economic output, broadly measured. And it sees people in Beijing and Shanghai paying house prices similar to those in San Francisco and New York, despite having just a quarter the income of American buyers. Now many believe that we are about to see a violent contraction of the property market in China. The government wants to intervene to curb speculation, and rein in what it…
Oil prices hit lowest level since Ukraine invasion on China growth fears
Global oil prices have dropped amid concerns over weaker growth in the Chinese economy caused by repeated Covid lockdowns and a downturn in the property sector. A barrel of Brent crude fell by about 5% to below $94 (£78) on Monday, hitting the joint lowest levels since the Russian invasion of Ukraine as traders reacted to weaker figures from the world’s second-largest economy. China’s central bank unexpectedly cut interest rates on its key lending facilities for the second time this year after disappointing official growth figures. Factory output in the…
Mortgage strikes threaten China’s economic and political stability
The alarm bells are ringing louder. Last week, hundreds of depositors gathered in front of the Zhengzhou branch of the People’s Bank of China in the provincial capital of Henan, demanding their frozen life savings held in rural banks. A day later, tens of thousands of homeowners threatened to stop paying mortgages on scores of unfinished housing projects they had purchased. All of this happened in a week where the officials reported lacklustre second-quarter economic performance. China’s economy is facing a dangerous cocktail of stalling growth, high unemployment, spreading mortgage…
No longer the most populous, but still China wants to be world number one | Rana Mitter
Last week, the UN’s global population project announced a major shift in the way the world looks. Next year, India, not China, will be the world’s most populous country. Right now, China has 1.43 billion people to India’s 1.41 billion, but by mid-century there will be more than 1.6 billion Indians to around 1.3 billion Chinese. At one level, this development ought to delight Beijing, which compelled its population into a “one child” policy for some 40 years. Yet there may be a few disconsolate faces in Beijing. The idea…
China funnels its overseas aid money into political leaders’ home provinces
China’s financing of overseas projects has disproportionately benefited the core political supporters of incumbent presidents or prime ministers of those countries that receive the funds, according to a new book. During the 20th century, China was mostly known as a recipient of international development finance. Its overseas development programme was modest – roughly on a par with that of Denmark. But over the course of one generation, as Beijing emerged as the world’s second-largest economy, its footprint began to extend far beyond its borders – often in the form of…
‘Do whatever it takes’: Beijing urged to act as China’s economy falters
At a recent online gathering of top Chinese economists, a palpable sense of urgency filled the virtual meeting room. In recent weeks, a slew of reports by Chinese and foreign economists pointed to a deteriorating economy. Outside the country, talk of China being the engine of global economic growth no longer convinces. During the meeting Huang Yiping, a Peking University professor and a former central bank adviser, urged Beijing to “do whatever it takes to save the economy”. Huang was paraphrasing a line from the height of the European debt…
Europe’s growth forecast cut as Ukraine war drives up inflation; diesel price hits record – as it happened
Closing summary Time for a recap Concerns over the global economic recovery have continued to mount, after China’s economic activity plummeted, and eurozone growth forecasts were cut. China’s retail sales tumbled by over 11% in April, while industrial production contracted by 2.9% — both the worst readings since the early months of the pandemic in 2020. Unemployment rose, while property sales saw their biggest slump since August 2006. Analysts warned that China’s economy could shrink this quarter, as Covid-19 lockdowns continued to hit consumer spending and factory output. The EC…
Fast, precise, too tough? Lockdowns risk stalling China’s economy
Veteran lorry driver Meng Hong has become an unlikely social media star in recent weeks. Since March, his short video talks about life on the road during Covid outbreaks on Douyin, the Chinese version of TikTok, have won him millions of likes. Most of Meng’s videos had been about “spreading positive energy” as he wrote in his account description. But on 13 April, he began to complain about what happened when drivers transported goods to Shanghai. “After we have delivered food, we were quarantined [after we left] or locked down…