CHINA DEBT
Proxy debt plays may slow as JPM index inclusion progresses
Analysts predict the Centre will maintain or reduce the fiscal deficit target to 5% of GDP in the upcoming budget, as foreign investment in Indian government bonds surges post JP Morgan index inclusion.
Sri Lanka reaches deal on debt restructuring with bilateral creditors including India, China and France
Sri Lankan President Ranil Wickremesinghe announced a debt restructuring deal with India, France, Japan, and China, a critical step in economic recovery after the 2022 debt default. Under an IMF bailout program, the agreement is expected to revive stalled foreign projects. Sri Lanka declared bankruptcy in 2022 due to economic mismanagement, COVID-19 impacts, and tax cuts. The deal defers loan payments until 2028 and extends repayment until 2043. Supporters celebrated the announcement in Colombo as it promises to restart crucial infrastructure projects.
China says escalation by EU over EV imports could trigger 'trade war'
Last week, the European Commission proposed tariffs of up to 38.1% on electric vehicle imports from China despite Beijing's protest, plunging trade ties to a new low and risking punitive retaliatory action. "The European side continues to escalate trade frictions and could trigger a 'trade war'," a statement attributed to the commerce ministry's spokesperson said. "The responsibility lies entirely with the European side."
Chinese automakers seek retaliatory tariffs on EU cars, state media reports
Industry insiders say both Europe and China have reasons for wanting to strike a deal in the months ahead to de-escalate tensions and avoid the addition of billions of dollars in new costs for Chinese EV makers, as the EU process allows for review.
China's May industrial output misses forecasts, retail sales a bright spot
China's industrial output fell below expectations, leading to calls for fiscal and monetary policy support. Retail sales exceeded forecasts, driven by global demand.
Evergrande liquidation law firm probing PwC, others for potential claims
Lawyers for China Evergrande Group's liquidators are investigating its former auditor, PwC, and other service providers to recover losses for creditors. Ordered into liquidation in January due to defaulting on $23 billion in offshore debt, Evergrande's extensive $300 billion liabilities make its case a potential model for future Chinese corporate liquidations. The probe focuses on potential wrongdoing that led to Evergrande's financial collapse.
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UBS fund manager likes China's junk debt but is skeptical on India
“In India, the market underestimates the risk, while in China high yield, Sri Lanka and certain other corners of EM, the market overestimates the risk,” Khan, who manages combined assets of roughly $1 billion, said in an interview this week.
IMF approves second review of Sri Lanka's $2.9 bln bailout, warns of economic risks
The IMF approved the second review of Sri Lanka's $2.9 billion bailout, emphasizing the need for Colombo to ensure debt sustainability through finalizing the MoU with key lenders.
Ray Dalio flags US-China ‘Economic Warfare’ among top global risks
Looking back in history, “economic warfare precedes military warfare,” he said. While most likely there will be no imminent form of military conflict, on the issue of Taiwan, the one-China policy “will not go on forever.”
Expect debt to remain stable; won't reduce significantly this year: TV Narendran, Tata Steel
So, this year is going to be a very crucial year, turnaround in Netherlands, last year was a loss, this year will be a profit at least at an EBITDA level and the UK second half we hope to move from a loss making facility to at least a balanced facility.
China's factory activity unexpectedly contracts in May
China's manufacturing activity fell in May, with the official factory survey showing a decline. Calls for fresh stimulus persist due to the ongoing property crisis impacting businesses, consumers, and investors.
IMF upgrades China's 2024, 2025 GDP growth forecasts but warns of risks ahead
"China's economic growth is projected to remain resilient at five percent in 2024 and slow to 4.5 percent in 2025," the IMF said in a press release, adding the decision was "driven by strong first-quarter GDP data and recent policy measures".
Shanghai lifts home-buying curbs to boost property sector
Shanghai eases property buying rules amidst a real estate crisis, reducing residency requirement to 3 years and minimum down payment to 20% for commercial housing mortgages.
China allocates billions of dollars to bailout its crisis-hit property sector
China has taken decisive measures to tackle the crisis in its property sector, which has been a crucial driver of its economic growth. The People's Bank of China has announced a 300-billion-yuan relending facility to support government-subsidized housing projects. Local state-owned enterprises are encouraged to purchase completed commercial homes to provide affordable housing. Commercial banks have issued significant loans for real estate development and individual housing.
Amid IMF loan talks, cash-strapped Pakistan mulls 5-yr extension on $15.5 billion Chinese energy debt
Cash-strapped Pakistan is considering to seek a five-year extension on its $15.5 billion debt in the Chinese energy sector as talks with the IMF for a fresh loan continue. The consent of the Chinese government and Independent Power Producers is crucial for contract amendments, which may involve lengthy negotiations. The extension could lead to a reduction in tariffs for consumers and a rise in outstanding liabilities by $1.3 billion over five years, potentially easing financial burdens and stimulating economic growth.
China is raising bullet train fares as debts and costs balloon
China raises bullet train fares to address rising costs and debts, impacting public services, state-owned enterprises, and international trade. The country shifts focus to high-tech manufacturing amid concerns over debt sustainability and global competition.
Despite $125 billion debt, why is Pakistan increasing its defence budget to 18000 crore rupees
Pakistan faces economic strain with a $124.5 billion foreign debt, 42% of its GDP. It boosts military capabilities through major arms imports, mainly from China, accounting for 82% from 2019 to 2023. Despite economic woes, it increases defense spending by 15.4% in the national budget, totaling 18000 crore Pak rupees. This military expansion includes submarines from China. Reports suggest Pakistan may have secretly supplied arms to Ukraine, contradicting its neutrality stance. Public discontent grows due to economic hardships and perceived military dominance in resource allocation.
Maldives gets IMF debt warning as more Chinese loans loom
Maldives warned by IMF of 'debt distress' due to heavy borrowing from China. Urgent need to increase revenue, reduce spending, and limit external borrowing to avoid economic crisis amid high risks and dependence on Chinese funding.
Two Chinese megacities lift home purchase curbs to attract buyers
Hangzhou and Xian lifted home purchase limits to revive the real estate market impacted by the pandemic and borrowing rules. The move aims to attract buyers and support the sector, following a decline in prices.
As China's Xi Jinping visits Europe, Ukraine, trade and investment are likely to top the agenda
Chinese leader Xi Jinping's European tour focuses on Ukraine, trade, and strategic alliances amidst heightened tensions. Starting in Paris, he meets Macron, signaling European autonomy. Visits to Hungary and Serbia, seen as China-friendly, strengthen ties amid criticism of Russia's invasion of Ukraine. US watches closely for geopolitical shifts.
China wants everyone to trade in their old cars, fridges to help save its economy
China's trade-in plan for electric vehicles aims to boost growth amid trade tensions. The initiative includes upgrading machinery, fiscal support details pending, and a focus on environmental standards and recycling networks.
Kyrgyzstan takes cue from India & blocks TikTok
Kyrgyzstan has blocked TikTok due to lax content rules and mental health worries for children. Concerns over debt to China, reaching $6.2 billion, add strain to the China-Kyrgyz relationship, alongside infrastructure projects financed by Chinese loans.
China set to post slowing growth on housing, consumption woes
China's economy is expected to have slowed in the first quarter due to challenges in the property sector and weak consumer activity. Despite setting a growth target of around five percent for the year, analysts view this goal as ambitious. While industrial production has increased, consumption remains sluggish. The property market continues to be a concern, with falling home prices and challenges for developers. Policymakers have introduced measures to boost infrastructure spending and consumption, but more stimulus may be needed.
China consumer prices rise at slower rate in March
China's inflation slowed to 0.1% in March, highlighting risks of deflation due to weak demand. Analysts urge increased fiscal support. The economy faces challenges from property sector woes and high youth unemployment, affecting industrial production and supply.
US 'will not accept' flood of below-cost Chinese goods: US Treasury Secretary Janet Yellen
US Treasury Secretary Janet Yellen emphasized that the United States "will not accept" a scenario where underpriced Chinese goods flood global markets, potentially harming industries elsewhere. Yellen, wrapping up high-level talks in China, expressed concerns about China's excess industrial capacity, particularly in sectors like solar and electric vehicles, which could lead to a surge of cheap exports and disrupt global markets. While Yellen highlighted areas of cooperation with China, including climate change and debt restructuring, she also raised concerns about China's national security actions and urged transparency in its economic policies.
China reaffirms financial support for Sri Lanka
China has said it would continue to support Sri Lanka, as the crisis-hit island nation's prime minister on Saturday wrapped up a visit to Beijing to try to finalise a debt restructuring deal. China had agreed "in principle" to restructure Sri Lanka's debt in December, but neither Colombo nor Beijing had given details and the two are yet to finalise an agreement.
China vows to treat foreign firms equally amid industrial upgrade push
For years, Western firms have complained of unequal access in China, a vast consumer market and also global supplier of raw materials and components. Western governments have expressed concern about "economic coercion", and companies have considered "de-risking" supply chains and operations away from China.
Court orders China Evergrande property developer to liquidate after it failed to reach debt deal
Evergrande was granted an earlier reprieve after it said it was attempting to "refine" a new debt restructuring plan of more than USD 300 billion in liabilities. Evergrande, the world's most indebted property developer, is one of many property firms that ran into trouble when Chinese regulators cracked down on excessive borrowing in the real estate sector.
China expands access to loans for property developers, acting to end its prolonged debt crisis
China has introduced new rules aimed at expanding access to commercial bank loans for property developers, allowing them to use loans secured against commercial properties like offices and shopping malls to repay existing loans and cover operating costs. These measures are part of Beijing's broader efforts to address the real estate industry crisis.
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