China

Loans to Venezuela from President Nicolas Maduro’s allies Russia and China would be renegotiated though the Paris Club if Maduro leaves power, an advisor to the opposition said on Wednesday, responding to concerns about favourable treatment for the two countries, Reuters reported. Ricardo Hausmann, who represents opposition leader Juan Guaido at the Inter-American Development Bank (IADB), said Guaido’s team has not determined how loans might be restructured under its governance because bilateral debt talks typically take place under the auspices of the Paris Club creditor group.

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The wild ride in an Indonesia textile maker’s dollar bonds is putting a spotlight on the risks that Asia junk bond buyers are taking, Bloomberg News reported. Four months after a subsidiary of Indonesia’s Duniatex Group sold a $300 million bond, attracting over $1 billion of orders, that bond has plummeted, losing nearly 70 cents on the dollar this week. The stunning fall, prompted by a missed loan payment by another group subsidiary, has shocked bond investors.

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Conditions in China’s credit market are helping to stoke startling growth in the nation’s pile of asset-backed securities, according to a top underwriter. Almost all types of bonds have been affected by the fallout from a surprise government takeover of a troubled lender in May, Bloomberg News reported. But banks are the main holders of China’s ABS and have better access to funding, largely preventing a sell-off in the sector, said Zuo Fei, general manager of the innovation financing department from China Merchants Securities Co.

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China’s efforts to shore up sagging economic growth are leading to a resurgence in indebtedness, underlining the challenge President Xi Jinping’s government faces in curbing financial risk, Bloomberg News reported. The nation’s total stock of corporate, household and government debt now exceeds 303% of gross domestic product and makes up about 15% of all global debt, according to a report published by the Institute of International Finance. That’s up from just under 297% in the first quarter of 2018.

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Risky borrowers are running into trouble in China and that is putting pressure on trust companies, an important corner of the country’s shadow-banking system, The Wall Street Journal reported. The fear is that this could further reduce the credit available for private businesses, acting as a drag on an economy whose growth is already slowing. Lightly regulated trust companies have been critical lenders for these firms, as traditional banks deal mostly with favored state-owned enterprises. These problems could also bounce back on many small investors.

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Before being detained by police in Shanghai, Lo Ching was lauded as the new-age Hua Mulan, the legendary female Chinese warrior. Now the downfall of Lo, chairman of a Hong Kong-listed conglomerate, has become a parable of the dangers of investing in China, a Bloomberg View reported. Noah Holdings Ltd., one of China’s largest wealth managers catering to high-net-worth individuals, is among the first to find out. The U.S.-listed asset manager has filed a lawsuit against Camsing International Holding Ltd.

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When she was a teenager in the 1970s, Zhou Xiaoguang peddled trinkets city to city and slept on trains, a formative chapter in her creation of the world’s largest costume jeweler, Neoglory Holdings Group Co. Leveraging her empire of baubles, China’s “fashion-accessory queen” added hotels, offices and malls. The magnate took a seat in China’s national parliament, accepted business accolades, including Ernst & Young’s “Entrepreneur of the Year,” and erected the tallest skyscraper in Yiwu, a trading city south of Shanghai. Now, China’s economic slowdown is making Ms.

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The respite from defaults in China’s onshore bond market isn’t seen lasting as risks to the country’s economy grow, Bloomberg News reported. While the number of defaults in China’s $13 trillion bond market slid for a second straight quarter, down from a record high last year, June saw a resurgence as borrowing costs rose and liquidity tightened. Analysts and investors expect debt failures to rise in the months ahead, in tandem with slowing economic growth. New bond defaults dipped to this year’s low in May amid China’s targeted support measures to shield the economy from a U.S. trade war.

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Closing Chinese outbound deals already was a difficult task. Growing trade tensions globally has made it even tougher, Bloomberg News reported. At $35 billion, the volume of Chinese outbound mergers and acquisitions is the lowest tally for the first six months of the year since 2013, according to data compiled by Bloomberg. The total represents a 75% drop from the peak of such M&A activity in the first half of 2016, when China National Chemical Corp. agreed to buy Swiss agrochemical maker Syngenta AG for $43 billion. Of the first-half total, only $6.8 billion was from U.S.

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China’s banking regulator plans to tighten rules on so-called cash-management products, according to people familiar with the matter, impacting an estimated $2 trillion worth of the investments, Bloomberg News reported. The China Banking and Insurance Regulatory Commission aims to treat CMPs similar to money-market funds by imposing stricter rules on pricing and restricting where and for how long the inflows can be invested, the people said, asking not to be identified as the deliberations are private.

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