Chinese companies have become net sellers of global assets this year for the first time since corporations from the country became big players in international mergers and acquisitions a decade ago, the Financial Times reported. The shift in status for Chinese groups — which have been prolific buyers of assets around the world in recent years — comes as economic growth in China slows to a 30-year low and trade tensions with the US begin to take a toll on manufacturers.
A year ago, the rallying cry among Chinese policymakers was deleveraging the economy — but now the country’s senior leadership is moving quickly to revive bank lending in a fight against flagging economic growth, the Financial Times reported. The change in tactics, underlined by a Rmb900bn ($126.4bn) boost to bank lending capacity last week, is a sign that China’s policymakers acknowledge they must do more to support the country’s economy as US tariffs on Chinese goods take a greater toll than originally expected.
Things that keep China’s top leaders up at night: a stalling economy, a bruising trade war and, increasingly, pigs. Specifically, a shortage of pigs, which is fast becoming a national crisis, the International New York Times reported. The price of pork has been rising for months, and it is now nearly 50 percent higher than it was a year ago, data published on Tuesday showed. Consumers are frustrated, and officials are quietly expressing alarm as they fight the outbreak of a disease that is devastating the country’s pig population and causing the shortage.
Fitch Ratings has lowered its rating on Hong Kong, citing uncertainty about the stability of the business environment following months of protests and looming challenges stemming from the city’s closer integration with mainland China, the Financial Times reported. The rating agency is the first to downgrade Hong Kong's long-term foreign-currency issuer default rating since the start of violent clashes between protesters and police, lowering its ranking of the Asian financial hub from double A plus to double A with a negative outlook, signalling the potential for further falls.
Peugeot automaker PSA Group and its Chinese partner Dongfeng Group have hammered out a plan to restructure their joint venture operations, slashing costs in the short term and aiming to boost annual sales to 400,000 vehicles by 2025, PSA said on Thursday, Reuters reported. Dongfeng Peugeot Citroen Automobiles (DPCA), the joint venture based in Wuhan, central China, plans to reduce the break-even point to below 180,000 vehicles in 2019 and further reduce to below 150,000 vehicles between 2020 and 2021, according to a post on PSA’s social media account in China.
More Chinese companies are defaulting on private bonds this year as the slowing economy weighs on weaker companies and firms seek to repay publicly traded debt first, Bloomberg News reported. The nation’s issuers have missed repayments on a record 31.8 billion yuan ($4.4 billion) of private bonds this year through August, compared with 26.7 billion yuan for all of 2017 and 2018 combined, according to data by China Chengxin International Credit Rating Co., one of China’s biggest rating firms.
HNA Group Co.’s cash pile shrank 20 times faster than its debts, indicating that pressure is building for one of China’s most indebted conglomerates to speed up asset sales, Bloomberg News reported. Cash, equivalents and short-term investments as of the end of June tumbled 61% from a year earlier, according to data derived from from the Hainan-based Chinese group’s interim report released on Friday. By comparison, total debt fell 3%.
Some developers may not be admitting as much but there are increasing signs that times are tough in real estate in China. All three of the country’s biggest residential property firms reported a drop in the number of full-time employees in their first-half results, the first simultaneous downsizing since 2015, Bloomberg calculations show, Bloomberg News reported. Real estate companies in the world’s most-populous nation are facing a triple whammy of increased home-buying curbs, a more stringent credit environment and a slowing economy.
Bank of England Gov. Mark Carney said global growth prospects are flagging due to a trade war pursued by Washington, creating new challenges for economic policy makers, The Wall Street Journal reported. “The pickup that we’ve been expecting in global growth has not transpired,” Mr. Carney said in an interview Friday on the sidelines of the Federal Reserve Bank of Kansas City’s annual symposium in the Grand Teton National Park. “When we trace it, it’s not because of Fed policy. It’s not because of global financial conditions.