China’s economy is going through a rough patch. Growth is slowing and its property bubble has well and truly burst. Unemployment is rising. So what, you might say? Every country has difficult periods when past excesses catch up with it. Eventually the economic cycle turns and recovery begins. China is the world’s second biggest economy and has grown at a stupendous pace over the past four decades. It plays a pivotal role in the global economy and has invested heavily in advanced manufacturing and AI. Sure, it has problems but…
Tag: Chinese economy
China’s property crisis deepens as developer Country Garden at risk of default
China’s property crisis deepened as two major developers faced severe financial difficulties that threaten to send shock waves through the country’s economy and beyond. Evergrande, the poster child for the woes of China’s property sector, filed for chapter 15 bankruptcy protection in New York on Thursday. The provision permits the company to protect its US assets and will allow cross-border bankruptcy proceedings as it undergoes a restructuring. The filing from Evergrande, which defaulted in 2021 after a liquidity crisis, came a day after China’s securities regulator notified the company’s Chinese…
How Geopolitics Is Complicating the Move to Clean Energy
He is known as the Minister for Everything. From the government offices of Indonesia’s capital to dusty mines on remote islands, Luhut Binsar Pandjaitan commands authority as the nation’s essential power broker. A four-star general turned business magnate turned cabinet officer, Mr. Luhut’s paramount aspiration is transforming Indonesia into a hub for the production of electric vehicles. But as he pursues that goal, he and his country are increasingly vulnerable to geopolitical forces beyond their control. Though this archipelago nation has long sidestepped entanglements in ideological rivalries, it is increasingly…
China’s struggling property giant Evergrande files for bankruptcy protection in US
China’s Evergrande Group, the world’s most heavily indebted property developer and the poster child for the country’s property crisis, has filed for bankruptcy protection in a US court. The company sought protection under chapter 15 of the US bankruptcy code, which protects its US assets while it attempts a restructuring deal. The code also provides mechanisms for dealing with insolvency cases involving more than one country. Evergrande, once China’s top property developer, was found in 2021 to be struggling with more than $300bn in liabilities, as government officials tightened scrutiny…
China Evergrande, Giant Developer, Files for Bankruptcy
China Evergrande, a behemoth property developer, filed for bankruptcy protection on Thursday more than two years after it defaulted on its debt. The company’s meltdown in 2021 was followed by the defaults of smaller developers and signaled the start of a slow decay of China’s real estate sector that now threatens to inflict damage on the country’s broader economy. Another giant developer, Country Garden, is staring down a default of its own after missing payments to lenders and holding $200 billion in unpaid bills. Evergrande’s bankruptcy petition, filed in the…
China and Hong Kong Stocks Slump as Economic Gloom Spreads
About three weeks ago, at a meeting chaired by Xi Jinping, China’s leader, officials acknowledged that China’s economy was facing “new difficulties and challenges.” According to the official Xinhua News Agency’s summary of the Politburo meeting, officials promised to juice the economy, which had started to rebound at the start of the year after Covid restrictions were lifted but had been struggling. The economic troubles, they said, arose from flagging domestic demand and a “grim and complex” global economy, among other factors. Chinese stocks jumped at the time, even though…
China’s economic problems show things are seriously amiss | George Magnus
At a Politburo meeting last month, China’s leaders referred to the economic recovery this year as “torturous”. You won’t often hear such candour coming from a Chinese Communist party institution, let alone such an elevated body. They were referring to current conditions, of course, but China’s problems reveal much that is systemically out of kilter in its economic and political system. During the past few days, some of the statistics China has published have caused a stir. Consumer prices in July were lower than a year ago, suggesting it might…
Biden’s China investment ban: who’s targeted and what does it mean for the 2024 US election?
Joe Biden has moved to restrict US investment in Chinese technology, signing an executive order which focuses on a few, sensitive hi-tech sectors including semiconductors, quantum computing and artificial intelligence (AI). It is the latest in a series of measures taken by the US to restrict China’s access to the most advanced technology and comes as the president has embarked on a multi-state tour of the south-west to tout his plans to revive American manufacturing after decades of decline. The restrictions are expected to take effect next year – and…
In previous downturns the world turned to China as an engine of growth – this time that driver may not be there
When Australia’s central bank released its quarterly economic update last week, China’s “uncertain” economic outlook topped a list of domestic worries for Australia. The International Monetary Fund too singled out China in its latest world economic outlook as among the “downside” tilts to its balance of risks. The recovery of the world’s second-biggest economy from the Covid pandemic was faltering, “with cross-border spillovers” likely if it slowed, the IMF said. Wednesday brought further confirmation of China’s disappointing performance as the economy slipped into deflation for the first time since late…
Italy approves 40% windfall tax on banks; China’s trade slumps – business live
From 1h ago Italy approves 40% windfall tax on banks The Italian government is hitting the country’s banks with a new windfall tax, to help families through the cost of living squeeze. Italy’s cabinet yesterday approved a 40% “windfall tax” on bank profits this year, with the proceeds earmarked to help mortgage holders and cut taxes. Deputy prime minister Matteo Salvini told a news conference that the levy will hit the profits reaped from higher interest rates: “One only has to look at the banks’ first-half 2023 profits, also the…