Treasury Secretary Janet Yellen appealed to China’s No. 2 leader to not let frustration over U.S. curbs on access to processor chips and other technology disrupt economic cooperation during a visit Friday aimed at improving strained relations, the Associated Press reported. Meeting with Premier Li Qiang, Yellen said Washington and Beijing have a duty to cooperate on issues that affect the world. She appealed for “regular channels of communication” at a time when relations are at their lowest in decades due to disputes over technology, security and other irritants.
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China’s inflation remained close to zero in May, sparking concerns on a falling spiral in prices and prompting the central bank to come out to downplay worries on the economic outlook, Bloomberg News reported. The consumer price index rose 0.2% from a year earlier, the National Bureau of Statistics said Friday, in line with forecasts and up from 0.1% in April. Producer prices declined 4.6% on the back of lower commodity prices and weak domestic and foreign demand.
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Chinese banks are facing increasing risks from rising non-performing loans (NPLs) and diminishing returns, making them a lightning rod for investors' worries about the world's second-largest economy, Reuters reported. Concerns about their exposure to local government financing vehicles (LGFVs), the investment firms that fund mainly infrastructure projects for local governments, and the crisis-hit property sector have pummelled their shares this week, dragging them to their steepest drops in about eight years.
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Chinese electric vehicle startup Singulato Motors is now facing bankruptcy proceedings initiated by a group of creditors, Pingwest reported. Singulato had been exposed for widespread unpaid wages and insolvency, leading to court-ordered enforcement. Established in 2014, Singulato received investments from local governments such as Tongling in Anhui, Zhuzhou in Hunan, and Suzhou in Jiangsu. Zhou Hongyi, founder and CEO of Qihoo 360, is also a major investor in Singulato. In total, the EV startup raised a funding amount of 17 billion yuan throughout its history.
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Washington and Beijing are talking again. The test now is whether they can settle into a new normal that avoids upending the global economy — or fall back into a cycle of acrimony and retaliation, the Wall Street Journal reported. Treasury Secretary Janet Yellen heads to China on Thursday through Sunday to meet with senior government officials, her department said. The trip comes as tensions over trade, technology and Taiwan prompt both countries to reconsider the deep commercial and investment ties that have defined the relationship for decades.
Cracks are showing in a pillar of China’s debt market: local-government financing vehicles (LGFVs), the Washington Post reported. Created to fund such things as roads, airports and power infrastructure, they rarely generate enough returns to cover their obligations. That means most rely on injections of municipal funds to stay solvent. With many local authorities facing cash-flow problems due to a real estate crisis, there are growing concerns about this $9 trillion debt market — prompting the country’s biggest state banks to take steps to avert a credit crunch.
Amid the ruins of a city ravaged by World War II, Karl Haeusgen’s grandfather invented a hydraulic pump he was so proud of that he founded a company to sell it, the New York Times reported. Back then, there were no revenue projections or five-year growth strategies. The plan was survival: “It was just about grabbing chances,” Mr. Haeusgen said. Seven decades and three generations later the family business, Hawe Hydraulics, ships some 2,500 parts around the globe. Instead of scrambling for sales, though, Mr. Haeusgen must parse the geopolitics of an ever more polarized world.
Liu Zhongtian, who founded Zhongwang Group and built it into Asia's biggest maker of aluminum extrusion products while launching himself onto the Forbes list of China's richest billionaires, now finds himself under legal restraint with his company in bankruptcy and much of his wealth evaporated, Nikkei Asia reported. What went wrong? Zhongwang was set to file a reorganization plan on June 20, nine months after creditors applied for a bankruptcy restructuring of the manufacturer's hundreds of subsidiaries and affiliates.
MSCI's global equities index lost ground on Wednesday after weaker-than-expected overseas data and as investors monitored a heating up of American-Chinese trade tensions while they awaited upcoming U.S. economic data and second-quarter earnings, Reuters reported. Investors shrugged off U.S. Federal Reserve meeting minutes released on Wednesday that showed a Fed united in its June meeting decision to hold interest rates steady to buy time to assess whether further hikes would be needed. Minutes also showed most members expecting more policy tightening eventually.
Chinese President Xi Jinping’s elevation of a long-serving technocrat as the central bank’s top Communist Party official signals policy makers will avoid any drastic shifts for now as the world’s second-biggest economy struggles to regain momentum, Bloomberg News reported. Pan Gongsheng’s appointment Saturday as party chief of the People’s Bank of China indicates the bank will stay the course, consistent with its recent approach of only modestly cutting interest rates and encouraging banks to lend more to targeted areas.