China lacks the rule of law, but that doesn’t stop Chinese companies from taking advantage of the U.S. legal system, according to a commentary in the Wall Street Journal. A California bankruptcy court judge last week approved a settlement agreement between the state-owned Aviation Industry Corp. of China, or AVIC, its subsidiaries and two American entities and their co-claimants. After years of litigation and under some duress, the Americans agreed to walk away with less than a third of the more than $85 million they were owed under an arbitrator’s judgment.
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Four financial institutions, including two Chinese banks, have written to finance minister Nirmala Sitharaman and the Insolvency and Bankruptcy Board of India (IBBI) seeking their intervention to speed up the resolution process of Reliance Infratel (RITL), the tower arm of Reliance Communications, the Financial Express reported. China Development Bank, Export Import Bank of China, Shubh Holdings Pte and SC Lowy Asset Management are the signatories to the letter.
China's securities regulator on Friday published draft rules on how fines for securities fraud offenses will be prioritised to compensate investors in civil cases, part of a broader push towards a U.S.-style system for initial public offerings, Reuters reported. "A sound securities civil compensation system is an important guarantee for the full implementation of the registration-based IPO system," the China Securities Regulatory Commission (CSRC) said in a statement on its website.
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Some dollar bonds of higher-rated Chinese developers were poised for their biggest-ever weekly drops, amid declines for many risk assets around the world, as ongoing worries about the property sector spread to stronger builders, Bloomberg News reported. Notes issued by CIFI Holdings Group Co. and Country Garden Holdings Co. fell at least 16 cents on the dollar this week to hit record lows, according to Bloomberg-compiled prices, plunging toward 50 cents. For China’s junk-rated dollar bonds overall, the average yield topped 25% for the first time Thursday in a Bloomberg index.
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Capital-hungry smaller Chinese startups are vying for speedy offshore listings by merging with blank-check firms at a time when Beijing's tighter scrutiny has slowed capital raising via overseas IPOs, company executives and bankers said, Reuters reported. As a string of special purpose acquisition companies (SPACs) hunt for targets to merge with, the startups see an opportunity to raise funds and get listed by cutting the time and regulatory rigour needed for traditional market debuts, they said.
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Gina Raimondo, the secretary of commerce, issued a stern warning on Tuesday to Chinese companies that might defy U.S. restrictions against exporting to Russia, saying the United States would cut them off from American equipment and software they need to make their products, the New York Times reported. The Biden administration could “essentially shut” down Semiconductor Manufacturing International Corporation or any Chinese companies that defy U.S. sanctions by continuing to supply chips and other advanced technology to Russia, Raimondo said.
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China’s central bank stepped up its financial support for the economy, saying it will transfer more than 1 trillion yuan ($158 billion) in profits to the government to help finance fiscal spending, Bloomberg News reported. It’s the first time the People’s Bank of China has disclosed this kind of transfer, although it’s required by law to hand over profits to the government every year.
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As the government in Hong Kong struggles to contain the city’s worst Covid outbreak ever, some residents have panicked, the New York Times reported. Tens of thousands of new Omicron cases are being reported each day, and deaths have surged. The anxiety gripping Hong Kong is not just about the explosion of infections, but also about what the government will do next. Under pressure from Beijing to eliminate infections, Hong Kong officials have vowed to test all 7.4 million residents.
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China’s government signaled more stimulus is on the cards by setting an aggressive economic growth target, calling for confidence amid rising domestic strains and global instability stemming from Russia’s invasion of Ukraine, Bloomberg News reported. While the growth goal of about 5.5% for this year is the lowest in more than three decades, it’s above consensus forecasts closer to 5% and far higher than the International Monetary Fund’s projection of a 4.8% expansion.
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China's export growth slowed in the January-February period largely due to base effects, and though the data beat expectations, Russia's invasion of Ukraine has heightened uncertainty over the outlook for global trade this year, Reuters reported. Outbound shipments rose 16.3% in the first two months of the year from the same period a year earlier, official data showed on Monday, beating analyst expectations for a 15.0% rise, but down from 20.9% gain in December. Imports increased 15.5%, easing from a 19.5% gain in December and below the forecast 16.5% increase.
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