Asia Pacific

China will allow local governments to sell bonds for the first time in two decades in a big step towards tackling a looming crisis in public finances and reining in the shadow banking sector that municipal authorities rely on for funding, the Financial Times reported. China’s finance ministry said 10 local governments in mostly wealthy and well-managed provinces and cities including Beijing, Shanghai and Guangdong, would be included in a pilot scheme to sell bonds on their own.

The clouds of the global financial crisis may have lifted, but six years later, the world economy is not creating nearly as many jobs as it was before 2008, a United Nations report on Wednesday concluded, nor is it expected to in the near term. That is a particularly worrisome fact at a time when more young people are entering the job market than ever before, the International New York Times reported. The economies of developed countries are likely to grow at 2 percent this year and 2.4 percent in 2015, a faster clip than in the two previous years, the report said.

China will increasingly manage its troubled property sector locally, as the nation seeks to avoid causing either an abrupt slowdown that undermines the economy or another surge in prices, according to government economists involved in policy discussions, the International New York Times reported. After increasing at double-digit rates through most of last year, home prices started easing in late 2013 as a sustained campaign to clamp down on speculative investment and easy credit gained traction.

As Turkish interest rates spike and the economy slows, local bankers and real estate experts are becoming increasingly worried that Istanbul’s real estate market may be heading for a fall, the International New York Times reported. And they are reminded of similarities between the situation here and what happened in Spain and Ireland, where alliances among banks, developers and politicians contributed to the creation of real estate bubbles that popped once interest rates began to rise, puncturing the overall economies as well.

Shares in Malaysian Airlines fell sharply for a second day to hit a record low on Monday, raising pressure on the state-run carrier to come up with a plan to restore investor confidence after missing flight MH370 and widening losses, Reuters reported. Malaysian Airline System Bhd (MAS) last week reported its worst quarterly loss in over two years. Investors were also spooked after the Wall Street Journal on Friday quoted Prime Minister Najib Razak as saying the government could not rule out bankruptcy for the airline.

Prime Minister Tony Abbott defended the budget and said Australians were put “on notice” about spending cuts before the last election, as polls showed his approval ratings and support for the government slumping, Bloomberg News reported. “Doing nothing was not an option,” Abbott told the Australian Broadcasting Corp. “We’re not doing this because we are somehow political sadomasochists.

Western Australia is contributing more to Australia's growth in personal insolvencies than any other part of the country, BankingDay reported. The Australian Financial Security Authority has released regional insolvency data for the first time, showing those parts of Australia where insolvency rates are above average. Nationally, the number of debtors entering a personal insolvency (bankruptcy, debt agreement or a personal insolvency agreement) in the March quarter was 2.5 per cent up on the December quarter. Insolvencies in greater Perth were up 18.2 per cent over the same period.

Following the disappearance of Flight 370, Malaysia Airlines finds itself locked in a struggle for survival, The Wall Street Journal reported. The jet that vanished March 8 has triggered an anguished and seemingly unending wait for relatives and friends of the 239 people aboard. For the airline itself, a collateral effect has been to worsen finances that were already precarious, pressured by a wave of low-cost competition. Malaysia Airlines had a loss of 1.17 billion ringgit, or $359 million, last year.

China’s economy is sputtering as evidence mounts that a nationwide property bubble is on the point of bursting, the Financial Times reported. Virtually every indicator for economic growth in China turned down in April as the all-important real estate market saw sales fall 7.8 per cent in renminbi terms in the first four months from the same period a year earlier. Investment in real estate is the single most important driver of the Chinese economy and a crucial factor in global commodity demand and pricing.

China’s broadest measure of new credit fell last month as authorities extended their campaign to tame financial dangers even as construction and manufacturing data point to risks that the economy’s slowdown will worsen, Bloomberg News reported. Aggregate financing was 1.55 trillion yuan ($249 billion) in April, the People’s Bank of China said yesterday in Beijing, compared with 2.07 trillion yuan in March. New local-currency bank loans were 774.7 billion yuan, down from 1.05 trillion yuan the previous month.