China’s largest private developer has warned it could default on its international debts, dealing another blow to the country’s embattled property industry. Country Garden has about $200bn (£163bn) in liabilities and nearly $11bn in dollar-denominated offshore bonds. It has not defaulted so far, but has missed coupon payments on some dollar bonds since last month and faces the end of 30-day grace periods for making payments from next week. It said in a statement to the Hong Kong stock exchange the company said that it “expects that it will not…
Tag: Chinese economy
Beijing’s mixed messages leave businesses ‘questioning’ investments in China
In July 2021, Chinese markets braced for a buzz. Syngenta, the Swiss agritech giant, filed for a $10bn-dollar listing on Shanghai’s STAR Market, a tech-focused stock exchange. It should have been a win-win for China; Syngenta said it would invest some of the new financing into agricultural technology, promising an injection of cash into an important sector. But, more than two years later, Syngenta still hasn’t listed. Beijing insists that China is open for business and that it is committed to supporting the private sector. But a renewed focus on…
How China’s Property Crisis Is Testing Its Too-Big-to-Fail Banks
China’s giant banking system, the world’s largest, is heavily exposed to the real estate crisis: Nearly 40 percent of all bank loans are related to property. And pressure is building on those banks as dozens of real estate developers have defaulted or missed payments on overseas bonds, led by China Evergrande, the world’s most indebted developer. The scale of China’s property problems — enormous levels of debt, an oversupply of apartments and consumers increasingly wary of buying — means the government could be forced in the coming years to spend…
Hong Kong Says It Calls the Shots, Not Beijing. Investors Are Wary.
Isolated from the world and pulled closer into Beijing’s orbit over the past three years, Hong Kong is finding that its fortunes are tied more than ever to China. The city’s stock market, which is seen as a proxy for China’s economy, is among the world’s worst performing this year. The rivers of money that flowed into companies, minting new wealth, have slowed to a trickle. And there is the gnawing feeling that the once-vibrant international city that staked its reputation on being separate from China has itself become more…
Peak China? Jobs, local services and welfare strain under economy’s structural faults
When finding a job feels as unlikely as winning the lottery, playing the actual lottery may seem like a more productive use of time. In the first half of 2023, faced with a struggling economy, Chinese consumers spent 273.9bn yuan ($37bn/£30bn) on lottery tickets, an increase of more than 50% on the same period in 2022. It’s just the latest symptom of an economy in distress. A record high youth unemployment rate of 21.3% in June prompted the government to stop publishing data on the issue – along with other…
What Retail Sales and Other Data Say About China’s Economy
China’s trains, planes, stores and beaches were a little fuller last month than a year ago, and the pace of activity picked up at factories, particularly those making mobile phones and semiconductors. A batch of numbers released on Friday by China’s National Bureau of Statistics showed a modest improvement in the country’s overall retail sales and industrial production during August. A series of small steps taken by the government over the summer, including two rounds of interest rate cuts, seems to be yielding a slightly better-than-expected improvement in the country’s…
People’s Bank of China Cuts Reserve Requirement to Spur Bank Lending
China’s central bank announced a policy change on Thursday that will allow the country’s banks to lend more money, but a nationwide economic slowdown has left many companies and households wary of borrowing. The move is the latest in a series of economic stimulus measures by the Chinese government as growth has failed to rebound strongly this year as many expected after nearly three years of stringent pandemic-control regulations. Other measures taken to strengthen borrowing and spending have included government-guided interest rate cuts in June and a round of rate…
Have we reached peak China? Inside the 15 September Guardian Weekly
Often depicted as an angry dragon, China’s current circumstances called for a more melancholic take on the Guardian Weekly’s cover this week. Much of the world’s attention towards the world’s second-biggest economy of late has focused on its geopolitical ambitions, but a picture is emerging from within the country that could have equally profound consequences. A Covid-battered economy – tainted by slowing demand and a deepening property crisis – coupled with an ageing population, have left many analysts wondering if China’s economic rise is stalling. Set against increasingly cool relations…
China May Ban Clothes That Hurt People’s Feelings. People Are Outraged.
In the 1980s, people in China could land themselves in trouble with the government for their fashion choices. Flared pants and bluejeans were considered “weird attire.” Some government buildings barred men with long hair and women wearing makeup and jewelry. Patrols organized by factories and schools cut flared pants and long hair with scissors. It was the early days of China’s era of reform and opening up. The Communist Party was loosening its tight control over society little by little, and the public was pushing the limits of self-expression and…
Have we reached peak China? How the booming middle class hit a brick wall
Holding her newborn daughter, Lynne, 33, feels apprehensive about the future. Her elder son, though adorable, is already draining the family coffers and he hasn’t even started school yet. His private kindergarten in Beijing costs 80,000 yuan (US$11,ooo) a year. Extracurricular classes, including 10 hours a week of English, sports, painting and online tutorials, cost another 60,000 yuan (US$8,300). She already knows that his five-month-old sister won’t get the same resources. “I don’t have the energy to jiwa again,” she says, using a Mandarin term for helicopter parenting. She longs…