After a major default, investor attention usually turns to the potential payout from credit default swaps, a type of security that acts as insurance against bankruptcy. But when one of China’s biggest property developers missed a coupon on its bonds late last month, few bothered to check whether there would be any money up for grabs, Bloomberg News reported. That’s because China’s CDS market is much less developed than in most major economies, meaning that many of the investors that bought Country Garden Holdings Ltd’s $10 billion of dollar bonds did so without hedging against default.
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China slipped back into deflation in October after a brief reprieve, highlighting how hard it is for Beijing to reinvigorate domestic demand in the world’s second-largest economy, the Wall Street Journal reported. In contrast to the U.S. and many advanced economies where taming inflation remains a high priority for central banks, China has struggled to revive inflation through most parts of the year—the latest evidence that a string of stimulus measures so far have failed to boost consumer confidence in the midst of a drawn-out property downturn.
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Ping An Insurance (Group) Co. said that it doesn’t hold any shares in Country Garden Holdings Co. and has no plans to acquire the distressed Chinese developer, refuting a report that sent the insurance giant’s stock tumbling on Wednesday, Bloomberg News reported. The insurer said in a Shanghai Stock Exchange filing that it hasn’t received any suggestions or requests from any government agency to take over Country Garden, responding to a Reuters report that China’s State Council instructed the government of Guangdong province to ask Ping An to take a controlling stake in the developer.
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The list of business executives and political figures who have gone missing in China keeps growing, the Wall Street Journal reported. Top executives at a video-streaming platform and a pharmaceutical company were the latest to disappear, as an intensifying clampdown by Beijing on alleged corruption and malfeasance shakes business confidence in China, among local and foreign firms alike. Chen Shaojie, chief executive of livestreaming firm DouYu, has been unreachable since October, a person familiar with the matter said.
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Chinese authorities have asked Ping An Insurance Group to take a controlling stake in embattled Country Garden, the nation's biggest private property developer, Reuters reported. China's State Council, which is headed by Premier Li Qiang, has instructed the local government of Guangdong province, where both companies are based, to help arrange a rescue of Country Garden by Ping An. A spokesperson for Ping An (601318.SS) said the company had not been approached by the government and denied the information reported by Reuters.
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China's Foreign Minister Wang Yi on Wednesday called on the Netherlands to jointly advance bilateral cooperation in economy, trade, science and technology, innovation and other fields, while maintaining the stability of global industrial and supply chains, Reuters reported. Wang, in a phone call with his Dutch counterpart Hanke Bruins Slot, described the Netherlands as a "gateway" for China's cooperation with Europe, according to a Chinese foreign ministry statement.
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The International Monetary Fund warned on Tuesday of risks posed by China’s financial and property sectors even as it took a more optimistic view on the country’s economic growth, the New York Times reported. The IMF forecast that China’s economy will expand 5.4 percent this year and 4.6 percent in 2024. Each estimate was 0.4 percentage points higher than the fund had predicted four weeks earlier.
After lending $1.3 trillion to developing countries, mainly for big-ticket infrastructure projects, China has shifted its focus to bailing out many of those same countries from piles of debt, the New York Times reported. The initial loans were mostly part of the Belt and Road Initiative, which Xi Jinping, China’s top leader, started in 2013 to build stronger transportation, communications and political links in more than 150 countries. But now the two main Chinese state banks that provided most of the infrastructure loans have reduced their new lending.
Iron ore has reached “unreasonable” levels that are hurting Chinese steel mills, according to China Mineral Resources Group, the state-backed firm trying to boost Beijing’s sway over prices, Bloomberg reported. Elevated costs are squeezing margins at steelmakers in the world’s top producer, Guo Bin, President of China Minerals, said at an event in Shanghai during the China International Import Expo. There needs to be more effort to “improve” pricing systems for raw materials, Guo said.
China’s deflationary pressures just aren’t going away, underscoring the fragility of the economic recovery as 2023 enters the home stretch, Bloomberg News reported. Data due Thursday will likely show that Chinese consumer prices slid back into deflation in October, according to economists surveyed by Bloomberg. Producer prices also probably declined for a 13th consecutive month. Consumer costs have been stubbornly weak this year. The consumer price index slipped into deflation in July and has since been teetering on and off the edge of negative year-on-year growth.