Asia Pacific

A Chinese lending spree of the magnitude that tipped Asian nations into crisis in the late 1990s and preceded Japan’s lost decades is putting pressure on top leaders to map out a strategy to tackle the threat. Half of the economists in a Bloomberg News survey say non-performing local-government and corporate debt will probably have a “significant impact” on China’s credit and economic growth.

Metals recycler CMA Corporation has gone into voluntary administration, TheBull.com.au reported. CMA operates more than 17 recycling facilities across Australia, New Zealand and Asia and has about 190 staff. The directors of CMA have appointed Phil Carter, Marcus Ayres and Nicholas Martin of PPB Advisory as voluntary administrators. "PPB Advisory will undertake an urgent review of CMA's operations," Mr Carter said in a statement on Friday. Until the completion of the review, CMA would continue to operate as usual. A meeting of CMA creditors will be held on August 14.

Takeshi Fujimaki, a former adviser to billionaire investor George Soros who won a seat in Japan’s upper house of parliament last month, said a delay in increasing the sales tax and reduction of Federal Reserve stimulus could cause the nation’s government bond “bubble” to burst, Bloomberg reported. Japan’s public debt, the highest ratio globally, may balloon to 245 percent of gross domestic product this year, according to the International Monetary Fund.

Tokyo Electric Power Co. is having difficulty sticking to its 10-year restructuring plan as its nuclear reactors remain idle, a key member of a government-backed fund providing financial assistance to Tepco said Thursday, The Japan Times reported. “Because the restarting of the Kashiwazaki-Kariwa plant is falling further behind schedule, it is a fact that differences between the business plan (and the current situation) are widening,” Yoshiharu Kawabata told reporters, referring to the complex in Niigata Prefecture, the biggest of Tepco’s three nuclear plants.

A family-owned retail fashion business in rural New South Wales founded in 1936 has collapsed, with administrators saying tough trading conditions and a poorly-timed expansion are to blame, SmartCompay.com.au reported. Brenstew, which currently trades in five retail outlets located in Dubbo, Tamworth, and Armidale under the brands Blowes Menswear, The Wardrobe and URXs, had administrators appointed last week. The company turns over more than $6 million annually.

Three quarters of China's solar-grade polysilicon producers face closure as Beijing looks to overhaul a bloated and inefficient industry, resulting in fewer but better companies to compete against Germany's Wacker Chemie AG and South Korea's OCI Co Ltd., Reuters reported. The polysilicon sector, which has around 40 companies employing 30,000 people and has received investment of 100 billion yuan ($16 billion), suffers from low quality and chronic over-capacity as local governments poured in money to feed a fast-growing solar panel industry, for which polysilicon is a key feedstock.

Cyprus’s economic reform programme is on track, but substantial risks remain, according to EU and International Monetary Fund monitors, the Financial Times reported. The island’s prospects are regarded as remaining uncertain as authorities struggle to contain a deepening recession and rebuild confidence in the battered banking system. “While the authorities have started to implement the programme with determination, risks remain substantial. . .

The Cyprus government and central bank on Tuesday announced milder than expected final terms of a bail-in for uninsured depositors at Bank of Cyprus but signalled it could take years before their remaining funds are fully unfrozen, the Financial Times reported. Deposits above the guaranteed limit of €100,000 will face a 47.5 per cent haircut, while an additional 5 per cent of total deposits would be made available for withdrawal by account holders on top of the 10 per cent already returned in cash, according to a joint statement by the finance bank and the central bank.

The Chinese state owes a lot of money – but even in Zhongnanhai, the secluded compound where the Communist Party’s top brass have their headquarters, no one really knows how much, The Wall Street Journal China Real Time Report blog reported. Sovereign debt issued by the central government in Beijing stands at 8.4 trillion yuan ($1.4 trillion), or 16% of GDP, as of the end of last year – wonderfully low by western standards.

Bank of Japan Gov. Haruhiko Kuroda gave a positive assessment of the effects of the unprecedented monetary stimulus the central bank rolled out in April, saying Japan's economy is on track to exit 15 years of declining prices, The Wall Street Journal reported. Little less than four months after the BOJ opened the monetary floodgates, Mr. Kuroda said Monday the step has had positive effects on financial markets and corporate finance, as well as expectations for further improvements in the economy and prices.