Asia Pacific

China’s state-owned airlines have had a turbulent year and are warning of first-half earnings to match when they report later this month, the Financial Times reported. With the bulk of their earnings in renminbi and fuel and aircraft costs denominated in US dollars, China’s big three airlines benefited from the Chinese currency’s steady appreciation against the greenback over the past decade. But over recent weeks, Air China, China Eastern and China Southern have all issued profit warnings, citing foreign exchange losses from the renminbi’s unexpected weakening earlier this year.

China is trying to regain control of the cash flowing across its leaky borders and the effects will be felt around the world, The Wall Street Journal reported. Beijing technically bans its citizens from buying overseas properties and stocks, and limits the money they can transfer abroad to $50,000 a year. Despite these rules, wealthy Chinese have found ways to move their money across the border, making them the biggest international buyers of properties in places like the U.S. and fueling a boom in Macau's casinos.

Chinese lending unexpectedly and drastically slowed in July to the lowest level since the depths of the global financial crisis, as a weak property market appeared to drive down demand for new loans, despite recent moves to ease credit, the International New York Times reported. A broad measure of new credit was 273.1 billion renminbi, or $44.3 billion, in July, the central bank reported on its website Wednesday.

The Financial Supervisory Commission (FSC) yesterday placed Global Life Insurance Co (國寶人壽) and Singfor Life Insurance Co (幸福人壽) under government receivership, as the two insurers had failed to contain financial losses or management malpractices, the Taipei Times reported. “We have no choice but to take the drastic step at 5:30pm to maintain market order and stability,” FSC Chairman William Tseng (曾銘宗) told a news conference.

The Reserve Bank of India (RBI) is working with the Centre to improve governance in public sector banks, RBI governor Raghuram Rajan said on Wednesday and called for a bankruptcy code to prevent misuse of the system in future. The governor also warned of crony capitalism slowing down the economy, the Hindustan Times reported. “Do we need a bankruptcy code? absolutely! It is something I have been saying for six years in reports that we need a bankruptcy code,” he said.

India's Bhushan Steel Ltd , a debt-ridden company whose managing director was arrested last week in a bribery case, has so far been able to service its loans, its finance director told Reuters on Tuesday. The Central Bureau of Investigation (CBI), India's top crime-fighting agency, arrested Sudhir Kumar Jain, chairman of state-run lender Syndicate Bank Ltd this month over allegations he took bribes to grant loan extensions to Bhushan Steel.

Cash-strapped South Korean mobile-phone maker Pantech Co. filed for court receivership Tuesday after its latest flagship smartphone failed to take off, The Wall Street Journal reported. The company, in which Qualcomm Inc. and Samsung Electronics Co. are major foreign shareholders, has been relying heavily on the South Korean market to sell its phones, where rivals like Samsung and LG Electronics Inc. are dominant players. Pantech said it filed for court receivership after months of trying to restructure its debt.

India's capital markets regulator yesterday approved rules for the creation of real estate investment trusts and infrastructure-investment trusts in the country, the Wall Street Journal reported today. The step comes a month after Finance Minister Arun Jaitley said that these trusts would be given a tax pass-through status, meaning that they wouldn't have to pay any federal taxes as long as they pass most of their income to shareholders in the form of a dividend.

China’s slumping property market is fueling speculation the industry is set for a shakeout as small developers face difficulty raising funds to pay off debt, Bloomberg News reported yesterday. Yield premiums on Chinese real estate bonds denominated in dollars have jumped 35 basis points this month to 582 basis points over Treasuries, the sharpest increase among emerging Asian countries, according to Bank of America Merrill Lynch indexes. That compares with a 19 basis-point advance for Indonesian builders.

Vietnam may change rules to quicken bad-debt sales that have been stalled by a reluctance to accept losses, hampering an economy that risks missing its growth target this year, Bloomberg News reported today. “Right now, everyone seems to be afraid of taking responsibility for creating losses to the state, so no one dares to make decisions to sell any debt at very low prices,” Nguyen Duc Kien, deputy head of the National Assembly’s Economic Committee, said in an interview yesterday.