The Trump administration has opened a broad new front in its global trade conflict, proposing to affix levies reaching $1.5 million on Chinese-made ships arriving at American ports, the New York Times reported. Such fees would apply even on vessels made elsewhere if they are operated by carriers whose fleets include Chinese ships — an approach that risks increasing costs on an array of imported cargo, from raw materials to factory goods. Given their potential to increase consumer prices, the levies could collide with President Trump’s promises to attack inflation.
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China needs to vastly step up its efforts to cleanse the balance sheets of the nation’s local governments, giving them the space needed to support consumer spending and strengthen the economy, one of the nation’s most prominent economists said, Bloomberg News reported. The central government should take on at least 20 trillion yuan ($2.8 trillion) worth of local sovereign debt, David Li Daokui, an economics professor at Tsinghua University and a regular adviser on policy to Beijing, said in an interview.
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China local governments are rushing to issue bonds to refinance hidden debt, further tightening liquidity in the financial system, Bloomberg News reported. Regional authorities are set to sell 1.7 trillion yuan (S$313 billion) of bonds in the first two months of 2025, an unprecedented amount for the period, data compiled by Bloomberg show. About half of the issuance, or 850 billion yuan, is to replace off-balance sheet debt, according to the data. The unusually big offering has exacerbated a cash squeeze this year, as banks rush to absorb the securities.
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China’s distressed developers are increasingly asking local courts to drive their restructuring efforts, as weak home sales continue to weaken their ability to make headway or deliver on private debt workout plans, Bloomberg News reported. Chongqing Casin Property Development Group late last month became the newest among its peers to apply for the court to overhaul its debt. The move followed a Bloomberg News’ report that defaulter China Fortune Land Development is considering scrapping a creditor-approved debt plan for a court-led solution.
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Chinese companies, mainly those in the tech sector, are accelerating plans to raise funds offshore, tapping into a rebound in investor sentiment fueled by hopes of Beijing's support for private firms and the popularity of DeepSeek, bankers said, Reuters reported. In a sign of the pickup in offshore equity sale momentum, two tech companies raised $500 million in total this week alone, and bankers and lawyers said a growing list of firms is preparing to launch offshore equity sales in the coming months.
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Legal warnings posted on the door of a private, for-profit hospital in eastern China tracked its descent into financial failure, the New York Times reported. Huiren Hospital in the city of Suqian was warned for failing to pay employees. Four months later, a judicial summons said it still had not paid back wages. Finally, in September a paper taped across its entrance declared the building closed. The hospital, once known for treating men with infertility or sexually transmitted diseases, had been hollowed out. The furniture and equipment were gone. There was no staff.
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China is expected to leave its benchmark lending rates unchanged on Thursday, a Reuters poll showed, as authorities walk a fine line between prioritising financial stability and providing more stimulus at a time when Beijing is facing fresh trade tensions. The central bank has adopted a cautious approach in recent cash injection despite a shift to an "appropriately loose" monetary policy stance this year, as yuan weakness and narrowing net profit margins at lenders limit its easing efforts.
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New bank loans in China surged more than expected to a record high in January as the central bank moved to shore up a patchy economic recovery, reinforcing expectations for more stimulus in coming months as U.S. tariffs threaten to pile more pressure on the economy, Reuters reported. Chinese banks extended 5.13 trillion yuan ($706.40 billion) in new yuan loans in January, more than quadrupling the December figure, data from the People's Bank of China showed on Friday.
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China's outstanding property loans were down 0.2% at the end of the fourth quarter, less than the prior year's 1% decline, central bank data showed on Friday, indicating government efforts to bolster the market were beginning to take effect, Reuters reported. Outstanding property loans at the end of 2024 stood at 52.8 trillion yuan ($7.27 trillion). Of the total, outstanding loans allocated for real estate project development rose 3.2% from the prior year to 13.56 trillion yuan.
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China saw record outflows of foreign direct investment last year, an exodus that threatens to persist after the resumption of a trade war with the U.S., Bloomberg News reported. Net FDI dropped by $168 billion in 2024, according to the State Administration of Foreign Exchange, the biggest capital flight in data going back to 1990. Foreign investment into China has slumped in recent years after hitting a historical high of $344 billion in 2021. International companies have been pulling back just as domestic firms also rapidly moved money abroad.
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