China

Country Garden Holdings Co. told some investors that it is considering further extending payments on some of its yuan bonds as a prolonged sales slump adds to the Chinese developer’s financial stress, Bloomberg News reported. In an effort to gain more time to map out a debt overhaul, Country Garden’s main onshore unit may push back payments on several yuan bonds due in September by six months, the people said, citing private conversations. That would include 10% of the principal on its 4.38% notes due September 2026. Bondholders’ approval would be needed for the delays.
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In recent weeks, bond traders have been piling into the perceived safety of Chinese government bonds, driving an epic buying spree that has pushed yields on the benchmark 10-year note, which move inversely to prices, to record lows, the Wall Street Journal reported. The rally has elicited an unusual response from China’s central bank, which is responsible for managing the state treasury and maintaining financial stability: Stop buying these notes.
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China on Tuesday accused Canada of protectionism after Prime Minister Justin Trudeau's government imposed a 100% tariff on imports of Chinese-made electric vehicles, matching U.S. duties on Chinese EVs, the Associated Press reported. The Chinese Commerce Ministry said the tariffs would disrupt the stability of global industrial and supply chains, severely impact China-Canada economic and trade ties and damage the interests of enterprises in both countries. “China is strongly dissatisfied and firmly opposes this,” it said in a statement.
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China’s central bank left a key interest rate unchanged, keeping a lid on a bond frenzy as it stays patient in supporting the economy, Bloomberg News reported. The People’s Bank of China kept the rate on its one-year policy loans, or the medium-term lending facility, at 2.3%, after a slashing the rate by 20 basis points in July. Meanwhile, the central bank withdrew a net 101 billion yuan ($14 billion) from the banking system this month, as 401 billion yuan of the loans expired on August 15.
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Bank of China Vice Chairman and President Liu Jin resigned for personal reasons effective on Sunday, the bank said, Reuters reported. The state-owned lender said that its board had approved Chairman Ge Haijiao to serve as acting president, according to a filing released by the bank on Sunday.
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Yuzhou Group Holdings Co. filed for Chapter 15 bankruptcy Thursday in New York, a move by the defaulted property developer to seek US court recognition for its offshore debt restructuring and ward off litigation, Bloomberg News reported. The Chinese builder, which failed to pay $2.9 billion of dollar notes with interest as of the end of 2023, is undergoing restructuring in Hong Kong and Cayman Islands. Read more.
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China is cranking up its massive export machine again, and this time there’s nowhere for competitors to hide, the Wall Street Journal reported. A Massachusetts startup called CubicPV bet on silicon wafers, a high-tech component in solar panels. Buoyed by President Biden’s climate legislation enacted two years ago, with billions of dollars in tax credits and government loans, CubicPV announced plans in late 2022 for a $1.4 billion wafer plant in Texas. Since then, China has nearly doubled its output of silicon wafers, way more than it needs.
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PwC China has informed its clients it expects a six-month business ban by Chinese authorities as early as September as part of punishment for its audit of collapsed property developer Evergrande, the Financial Times reported. The ban would prevent it from signing off on financial results and initial public offerings and from conducting other regulated activities, the report stated, citing multiple clients. PwC has been under scrutiny for its role in auditing Evergrande since the troubled property developer was accused in March of a $78-billion fraud, leading to an exodus of clients.
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China told some trust companies to stop raising money from individuals to fund local government financing vehicles in its latest effort to curb growing financial risks, Bloomberg News reported. The National Financial Regulatory Administration (NFRA) recently banned some lower-rated trust firms from selling wealth products underpinned by LGFVs on concerns of potential defaults. It’s unclear how many of China’s 67 trust firms received below-par ratings in the watchdog’s latest assessment.
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Chinese property developer Kaisa Group Holdings said it has made significant progress in restructuring its offshore liabilities, enabling the beleaguered company to offer billions of dollars in new debt and convertible bonds, the Wall Street Journal reported. The company has entered into a restructuring support agreement with its debtholders, under which Kaisa will issue $5.0 billion of notes in six tranches and $4.8 billion of mandatory convertible bonds in eight tranches, the developer said Tuesday.

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