Asia Pacific

The government will likely suffer from a tax revenue shortfall this year as many businesses struggle to make profits due to plunging exports and sluggish domestic demand as a result of the global economic downturn, The Korea Times reported. Many salaried workers and self-employed people have seen their income shrink in the wake of the tight job market and other unfavorable economic conditions, making it difficult for state collectors to levy as much tax as they did last year.

In 2009, a flood of loans saved the day for China's economy. Now, there is barely a trickle, The Wall Street Journal Heard on the Street blog reported. New loans in July slid 41% month on month to 540.1 billion yuan ($84.9 billion). One reason: a new dynamic in China's banking system from wealth-management products, which offer a higher return than bank deposits. Fitch Ratings estimates about 10.4 trillion yuan was in WMPs at the end of June, equal to 11.5% of bank-sector deposits.

Concerns about China's economy intensified Friday on signs that attempts to kick-start growth aren't working and new evidence of weakness in the export sector, putting pressure on Beijing to move more aggressively, The Wall Street Journal reported. New loans by China's banks fell to 540.1 billion yuan ($85.1 billion) in July, down from 919.8 billion yuan in June, and the lowest level since September 2011, despite efforts by the central bank to make it easier to lend. Export growth also disappointed. July exports were up just 1% from a year ago, slowing from June's 11.3% pace.

In 2009, a flood of loans saved the day for China's economy. Now, there is barely a trickle, The Wall Street Journal Heard on the Street blog reported. New loans in July slid 41% month on month to 540.1 billion yuan ($84.9 billion). One reason: a new dynamic in China's banking system from wealth-management products, which offer a higher return than bank deposits. Fitch Ratings estimates about 10.4 trillion yuan was in WMPs at the end of June, equal to 11.5% of bank-sector deposits.

The Korean corporate sector has gone into restructuring mode to cope with the worsening global economic downturn, selling assets to secure much-needed cash, and slimming down organizations to reduce operating costs, The Korea Times reported. But if things go from bad to worse, businesses are widely expected to implement a full-scale overhaul, that would send tens of thousands of workers onto the street as seen in the wake of the 1997-98 Asian financial crisis.

The Tasmanian timber company Gunns has rejected reports an insolvency firm has been inspecting its books, ABC News reported. Gunns says it has hired the firm KordaMentha to provide advice on the sale of some of it woodchip processing assets. Newspaper reports claim the insolvency specialists were appointed by lender ANZ to examine Gunns' finances. Gunns has revealed an $800 million devaluation of a range of assets because of a fall in global woodchip process, leaving its balance sheet in the red.

A light is shining at the end of the tunnel for Indian telecom tower company GTL Infrastructure. After a drawn-out restructuring process, GTL is close to finalizing a cashless exchange offer with holders of its US$228.3m foreign currency convertible bonds, Reuters reported on an International Financing Review story. Bondholders have approved a restructuring proposal tabled by GTL's advisers Houlihan Lokey and Avista Advisory, leaving a resolution likely before mid-September if the Reserve Bank of India approves it.

The Financial Supervisory Commission (FSC) yesterday said it would extend the government’s receivership of cash-strapped Kuo Hua Life Insurance Co for another year, allowing the receiver more time to secure a buyer, the Taipei Times reported. The move marked the fourth time the receivership has been extended, as the current one is due to expire tomorrow and the receiver — the semi-official Insurance Stabilization Fund — is in the process of arranging an auction in late October. The financial regulator has taken control of the insolvent company since Aug. 4, 2009.

Embattled timber company Sino-Forest Corp., which is in bankruptcy protection, says it is owed half a billion dollars from companies that have been deregistered in China, thestar.com reported. Sino-Forest, which filed for bankruptcy protection under the Companies’ Creditors Arrangement Act in March, said in a new release Tuesday that it intends “to take all steps necessary” to collect receivables owing to it. It added that it believes the deregistrations, which have the effect of terminating the existence of the entities, were improper under Chinese law.

Shareholders in Renesas Electronics Corp. have reached a final agreement to provide around Y50 billion in loans to help the struggling Japanese chipmaker turn its business around through restructuring measures, sources familiar with the matter said Monday, Kyodo News reported. The agreement was reached by NEC Corp., Hitachi Ltd. and Mitsubishi Electric Corp. after Renesas announced earlier this month its restructuring measures featuring closing or selling eight of its 18 domestic plants and eliminating more than 5,000 jobs with early retirements.