Asia Pacific

Rating agency Moody's warned on Wednesday that financial distress will rise among Chinese companies amid a slowing economy and a government reform agenda which is intended to allow markets to play a decisive role. But policy easing and government support would prevent corporate distress from rising so much it could cause systemic risk to onshore and offshore markets, it said. The agency also underscored the worsening covenant quality of property high yield bonds, although these agreements offered more protection than those in other regions.

The Canberra Eye Hospital is in voluntary administration and its owners, who include pioneering eye surgeons, appear to be in a dispute over the sale of the business with shareholders, The Canberra Times reported. One of the founders, Dr Leo Shanahan, said the company had $2.3 million in the bank 15 months before it went into voluntary administration in about January.

With youth unemployment near a 15-year high and the government planning to raise the retirement age, intergenerational conflict over jobs is rising in South Korea, Bloomberg News reported. The jobless rate for workers aged 15 to 29 touched 11 percent earlier this year and is about four times higher than for those aged 40 and above. At the other end of the spectrum, Korea has an underdeveloped pension system and the highest elderly poverty rate in the OECD, as companies push employees in their fifties into early retirement to contain costs.

The Reserve Bank of India has provided banks, which are struggling to cope with a mountain of bad debt, new ammunition to deal with defaulting companies, The Economic Times reported. On Monday, the banking regulator issued new norms for Strategic Debt Conversion (SDR) which will give lenders the right to convert their outstanding loans into a majority equity stake if the borrower fails to meet conditions stipulated under the restructuring package. Allowing loan conversion will now be a precondition for all debt restructuring deals.

Proposed new obligations on multinationals to produce country-by-country reports on their financial affairs will have a “massive impact” on them, a leading member of the Organisation for Economic Development and Cooperation has said, the Irish Times reported. Pascal Saint-Amans, director of the Center for Tax Policy and Administration at the OECD, was reacting to what he said were “angry responses” to the organisation’s latest proposals on the topic.

The headline currency story of this year is about the negotiations between Greece and the “institutions” over whether its currency remains internationally usable . Much less noticed are the negotiations between China, which is about a hundred times larger than Greece, and the legacy financial powers over the degree to which the renminbi becomes more internationally usable. While renminbi internationalisation is a process, not an event, an announcement is being orchestrated for September.

A Melbourne-based clothing manufacturer and wholesaler founded in 1996 has entered voluntary administration, SmartCompany.com.au reported. LM Australasia started out producing and wholesale women’s lingerie before growing into a fashion house that specialised in seamless garments, including knitwear, tops, leggings and shapewear. The business is based in the Melbourne suburb of Collingwood and, in 2010, employed 20 staff in Australia. At the time it also had an office in China, with a staff of 10.

As an industrialist in Pakistan’s southern port city of Karachi recounts his woes, from frequent power cuts to a shortage of trained workers, his accountant barges in with a question. “Sir, how much should we earn from the farm this year?” the Financial Times reported. “Let me see how much we need to earn from the farm and get back to you,” the industrialist replies. The encounter provides a glimpse of one of Pakistan’s toughest economic challenges: reforming its chronically dysfunctional tax-collection system.

Australia’s corporate regulator is to launch a crackdown on the country’s banking culture, which it claims is encouraging misconduct and the “fleecing” of consumers, the Financial Times reported. The intervention by the Australian Securities and Investment Commission follows a series of banking scandals and new research showing that a poor risk culture at financial institutions is allowing misconduct and “Machiavellian” tendencies to flourish.

Australia is raising its minimum wage by an above-inflation 2.5 per cent, providing a boost to low-paid workers amid sluggish economic growth, the Financial Times reported. From next month about 1.86m workers must be paid a weekly wage of at least A$656.90 ($501.50), Australia’s workplace regulator ruled on Tuesday. On an hourly basis the rate rises to A$17.29 an hour, one of the highest minimum wage levels in the world.