More than one in five young people in China are jobless. The government casts much of the blame on the job seekers themselves, insisting that their expectations have gotten too high, the Wall Street Journal reported. Young people need to stiffen their spines and embrace hardship, says leader Xi Jinping, who labored in the countryside in China’s Cultural Revolution. If they can’t find jobs they want, they should work on factory lines or engage in poverty relief in rural China. The government’s guidance is ringing hollow with many young people.
Read more
Pan Gongsheng was named China’s central bank governor Tuesday in the widely anticipated final major appointment of the ruling Communist Party’s once-a-decade change of power, the Associated Press reported. Pan, a deputy central bank governor and veteran of China’s state-owned banking industry, succeeds Yi Gang, an American-trained economist who held the post for five years. The endorsement of Pan's promotion by the ceremonial legislature, the National People’s Congress, follows other Cabinet-level appointments announced in March.
Some holders of a $400 million bond issued by Wanda Properties Overseas have received payments on the note which matured on Sunday, Reuters reported. However, holders of a bond issued by another unit of China's largest commercial real estate developer Dalian Wanda Group, Wanda Properties Global, had not received a coupon payment by Tuesday on a note maturing in 2025, one of the sources added.
Read more
A Hong Kong court on Monday said it will decide in September on an offshore debt restructuring for embattled property developer China Evergrande Group that could allow creditors to recoup up to about one-quarter of what they are owed, Reuters reported. Evergrande, the poster child of China's property sector crisis, has $330 billion in liabilities, making it the world's most indebted developer. A default in late 2021 triggered a string of defaults at other builders and left thousands of homes unfinished across China.
Read more
China’s top leaders signaled more support for the troubled real estate sector alongside pledges to boost consumption and resolve local government debt, though fell short of announcing large-scale stimulus to support the slowing economic recovery, Bloomberg News reported. The ruling Communist Party’s 24-member Politburo — its top decision-making body led by President Xi Jinping — promised “counter-cyclical” policy, according to a readout published Monday by the official Xinhua News Agency. That suggested more economic support as well as an “adjustment” of restrictions in the property sector.
Read more
Chinese regulators met with global investors on Friday, according to people familiar with the matter, stepping up the government’s bid to boost market confidence as the country’s economic recovery loses steam, Bloomberg News reported. China Securities Regulatory Commission Vice Chairman Fang Xinghai met with some global venture capital and private equity firms to hear their concerns about investment in the country, the people familiar said, requesting not to be named because the matter is private.
Read more
China's frail growth could weigh on companies with exposure to the world's second-largest economy, including Apple, big chipmakers and luxury retailers as they report quarterly results in the next few weeks, Reuters reported. Wall Street is bracing for a steep drop in second-quarter U.S. earnings, with profit margins expected to be hurt by U.S. inflation and weaker spending. Both U.S. and European companies with exposure to China could be hit by that economy's sluggish growth as its post-COVID momentum has faltered rapidly.
China's central bank is expected to leave key interest rates on hold on Thursday, but the pressure to ease is growing almost by the day, Reuters reported. Japanese trade, Australian unemployment and Hong Kong inflation data top the regional economic calendar on Thursday, and investors will be hoping the continuing corporate earnings-fueled gains on Wall Street will drive local risk appetite. The Dow Jones Industrials is now up eight days in a row for the first time since September 2019. It last posted a nine-day winning streak in September 2017. Sentiment was again positive during the U.S.
Whatever is driving Wall Street higher — the finishing line of the Fed's rate-hiking cycle, a falling dollar or strong earnings — it is not really filtering through to Asian markets, Reuters reported. The disconnect between Asia and the rest of the world has widened recently, and correlations between the MSCI Asia ex-Japan index and leading U.S. and global indexes are the weakest in about a month. A solid batch of second quarter earnings from some of the largest U.S. banks and financial firms on Tuesday kept the U.S. stock market juggernaut rolling.
China's economy grew at a frail pace in the second quarter as demand weakened at home and abroad, with the post-COVID momentum faltering rapidly and raising pressure on policymakers to deliver more stimulus to shore up activity, Reuters reported. Chinese authorities face a daunting task in trying to keep the economic recovery on track and putting a lid on unemployment, as any aggressive stimulus could fuel debt risks and structural distortions.