China’s ability to repay its government borrowing has been downgraded by the credit rating agency Moody’s, which said the ripple effects from a crisis in the property sector would undermine efforts to revive its flagging economy. Moody’s warned that Beijing would need to bail out local and regional governments and state-owned enterprises that were struggling with rising debts, hampering efforts to boost investment and growth. The rating agency downgraded its outlook for Chinese sovereign bonds from stable to negative on Tuesday, sending a signal to potential lenders that the risk…
Tag: Chinese economy
China’s Evergrande wins more time to restructure debts
The property developer Evergrande has been granted an extension until late January to try to restructure its debts and avoid liquidation in one of the most high-profile cases in China’s long-running property crisis. Evergrande was once China’s biggest property developer, but a default on offshore debt obligations in 2021 started a lurch from one crisis to another. It has reported debts of more than $300bn (£237bn), much of it to individuals whose properties were never built. The company is facing the prospect of liquidation after a creditor, Top Shine Global,…
Chinese shadow bank admits £30bn shortfall after ‘management ran wild’
One of China’s biggest financial conglomerates with links to the country’s ailing property market has admitted a shortfall of nearly £30bn as it warned investors that it is “severely insolvent”. Zhongzhi, an asset and wealth management company in China’s shadow banking sector, said its total assets amounted to 200bn yuan (£22.5bn) against obligations of up to 460bn yuan, in a letter to shareholders issued on Wednesday. In the letter, the company blamed its brewing insolvency crisis on the departure of several senior executives, which left a situation in which “internal…
China’s carbon emissions set for structural decline from next year
China’s carbon emissions could peak this year before falling into a structural decline for the first time from next year after a record surge in clean energy investments, according to research. Emissions from the world’s most polluting country have rebounded this year after the Chinese government dropped its Covid restrictions in January, according to analysis undertaken for Carbon Brief. However, this rebound in fossil fuel demand emerged alongside a historic expansion of the country’s low-carbon energy sources, which was far in excess of policymakers’ targets and expectations. Beijing’s solar and…
China falls back into deflation territory; UK energy companies pay £10.8m for missing smart meter targets – business live
From 31m ago Introduction: China’s economy falls back into deflation as pork prices tumble Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy. China has dropped into deflationary territory for the second time this year, reigniting concerns over its economy. Consumer prices in the world’s second-largest economy fell by 0.2%, compared with the previous year, in October, a larger decline than the 0.1% expected. Chinese producers also cut their prices at a faster rate. The producer price index (a measure of prices…
Banks pumped more than $150bn in to companies running ‘carbon bomb’ projects in 2022
Banks pumped more than $150bn last year into companies whose giant “carbon bomb” projects could destroy the last chance of stopping the planet heating to dangerous levels, the Guardian can reveal. The carbon bombs – 425 extraction projects that can each pump more than one gigaton of carbon dioxide into the atmosphere – cumulatively hold enough coal, oil and gas to burn through the rapidly dwindling carbon budget four times over. Between 2016 and 2022, banks mainly in the US, China and Europe gave $1.8tn in financing to the companies…
High interest rates help double HSBC profits
HSBC will hand more than $3bn (£2.5bn) to shareholders, after higher interest rates helped to more than double quarterly profits, despite taking a financial hit on China’s property crisis. The London-headquartered bank said it was launching the share buyback, and pay a dividend worth 10 cents a share, after what its chief executive, Noel Quinn, hailed as “three consecutive quarters of strong financial performance”. The move came as HSBC revealed it had made $7.7bn in pre-tax profits between July and September. While it fell short of average analyst forecasts for…
China launches tax investigations into Apple iPhone maker Foxconn
China’s tax authorities have launched multiple investigations into the company that makes the iPhone, months after its billionaire founder announced he would run in Taiwan’s presidential elections. Foxconn faces tax audits of its operations in China, as well as investigations into land use in two Chinese provinces, according to reports by local media. The investigations, which were confirmed by the Taiwan-based manufacturer but have not been officially announced by any of China’s government departments, are thought to be politically motivated. Foxconn’s founder, Terry Gou, announced in August he would run…
China’s Country Garden risks default after ‘missing bond payment’
The crisis in China’s property sector deepened as Country Garden, the country’s biggest developer by sales, reportedly missed its final deadline for an interest payment on a dollar bond, putting it at risk of default. The company, which has about $200bn (£163bn) in liabilities and nearly $11bn in dollar-denominated offshore bonds, was due to make a $15.4m coupon repayment this week, but failed to do so, according to reports. Its share price fell 4% in Hong Kong on Thursday, and is down 74% since the beginning of the year. Country…
China’s economy grows faster than expected as retail sales rise
China’s economy grew at a faster than expected rate in the third quarter, suggesting the recent flurry of policy measures is helping to bolster a tentative recovery in the world’s second-biggest economy. Rapidly weakening growth in China since the second quarter has prompted authorities to step up support, with Wednesday’s data indicating the stimulus is starting to gain traction, although a property crisis and other problems continue to pose risks. Gross domestic product (GDP) grew 4.9% in July-September from a year earlier, data released by the National Bureau of Statistics…