Asia Pacific

China is ramping up efforts to halt a flood of money leaving the country in response to an economic slowdown, moves that risk undermining Beijing’s ambition to elevate the yuan’s profile on the world stage, The Wall Street Journal reported. Its latest steps involve curbing the ability of foreign companies in China to repatriate earnings, shrinking the pool of Chinese yuan available for banks in Hong Kong to make loans, and banning yuan-based funds for overseas investments, people with direct knowledge of the matter said.

Default risks for a pile of $15tn in Chinese corporate debt are rising to their highest levels since the 2008 financial crisis as sluggish demand, weak pricing and high leverage sap the dynamism of the country’s most powerful companies, the Financial Times reported. Rating agencies that assess credit risks among China’s top corporations are predicting a jump in bond repayment defaults this year as they add more companies to their watch lists for downgrades, ratings executives say.

The Financial Supervisory Commission (FSC) yesterday placed Chaoyang Life Insurance Co (朝陽人壽) under government receivership to prevent further deterioration of the company’s financial condition, the Taipei Times reported.“The company has repeatedly failed to carry out its proposed financial improvement measures and its negative net worth continued to worsen on an annual basis. It was NT$2.2 billion [US$65.23 million] in the red as of last month,” Insurance Bureau Director-General Jenny Lee (李滿治) said at a news conference.

If any world leader has surfed the wave of the oil boom, it is Ilham Aliyev, the Financial Times reported. In 2003, just as oil prices began to soar, Mr Aliyev succeeded his father as president of Azerbaijan. Over the next decade he presided over an era of rising prosperity that transformed Baku into a kind of Dubai on the Caspian and imbued the country with the newfound confidence to project itself on the world stage. But Azerbaijan’s oil boom has come to a juddering halt.

Chinese officials readily admit that communication has not been their strong point when it comes to dealing with international investors, the Financial Times reported in a commentary. The question of how China manages the renminbi is critical for global trade and commodity prices; the market turmoil following recent changes in the currency regime was exacerbated by Beijing’s failure to explain its intentions. Policymakers have now made it explicit that they have no wish to engineer a big devaluation.

China's volatile stock markets fell more than 1 percent on Wednesday, though mounting chatter about imminent policy stimulus provided some support against the backdrop of a fresh slide in oil prices, which hit stock markets across the globe, Reuters reported. Asian and European stocks were down sharply as U.S. crude sank beneath $28 a barrel for the first time since 2003, hammering energy stocks and boosting safe havens.

Primorsk International Shipping Ltd., which operates a fleet of ice-class oil tankers in the Arctic, has filed for bankruptcy protection after reaching the terms of a debt-for-equity swap with bondholders, The Wall Street Journal reported. The oil shipper, registered in Cyprus, has been in talks with a group of Norwegian bondholders on the terms of a debt restructuring for more than a year, said Holly Etlin, the company’s chief restructuring officer, in an affidavit filed Sunday with the U.S. Bankruptcy Court in New York.

Behind the numbers showing China’s continued slowdown at the end of last year lies a warning for Communist Party leaders who have been equally determined to embrace economic change and to ensure a rapid pace of growth, Bloomberg News reported. The flashing yellow light: there’s less and less power behind policy makers’ stimulus. For each $1 in credit expansion, China added the equivalent of 27 cents of gross domestic product last year, the least since 2009, according to data compiled by Bloomberg from government figures released Tuesday. As recently as 2011, each $1 generated 59 cents.

Azerbaijan is to impose a 20 per cent tax on transactions to remove cash from the country, as the oil-dependent government tries to contain a currency collapse that has triggered public protests. Baku’s imposition of capital controls is one of the most extreme measures taken so far by former Soviet countries as the region grapples with a crisis triggered by the plunge in oil prices to 13-year lows, the Financial Times reported. The manat has tumbled by more than a third since the central bank abandoned its peg to the dollar last month.

Sainty Marine Corporation started small, buying and selling a few ships in the 1980s. But Sainty Marine, a Chinese state-owned company, went on a debt-fueled binge over the last few years, opening its own shipyards and signing orders worth hundreds of millions of dollars each, the International New York Times reported. Now, heavily indebted companies like Sainty Marine are at the center of the economic troubles in China that have unsettled currency, commodity and stock markets of late.