China is seen adding stimulus to stabilize growth next year, with various ministries vowing more proactive measures to reverse the slowdown caused by a worsening property slump, weak consumption and the coronavirus, Bloomberg News reported. As downward pressure on the economy increases, China’s top leaders made ensuring stability their top priority for next year, telling all regions and ministries to share responsibility in achieving that goal. Heeding the call, the central bank pledged to pro-actively introduce monetary policies that are conducive to economic stability.
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China Evergrande Group said it has resumed construction at most of its housing projects as authorities push the debt-laden developer to pay migrant workers and deliver apartments, Bloomberg News reported. Nearly 92% of Evergrande’s property projects have so far restarted, compared with just about 50% at the beginning of September, according to a company statement released Sunday night. The number of workers involved in the projects that have resumed building has risen 31% from September to 89,000.
China’s central bank pledged greater support for the real economy, and said it will make monetary policy more forward-looking and targeted Bloomberg News reported. There will be more “proactive” use of monetary policy tools, the People’s Bank of China said in a statement on Saturday. It added that there will be “good use” of the monetary policy tools’ quantitative and structural functions, referring to the adjustment of liquidity in the market and policies targeted at certain groups. The monetary policy committee held a meeting on Friday that was chaired by Governor Yi Gang.
This November, Chinese media reported that a 42-year-old restaurant owner in the central Henan province — who had made a name for himself by passing out free meals to medical workers — died by suicide after severe floods and yet another local outbreak of COVID-19 left his mired business hopelessly in debt, according to a commentary in Sixth Tone. That same month, a court in the southern megacity of Shenzhen made national headlines by approving a bankruptcy petition from a single mother and former small-business owner.
China Evergrande Group said on Sunday it had made initial progress in resuming construction work with its chairman vowing to deliver 39,000 units of properties in December, compared with fewer than 10,000 in each of the previous three months, Reuters reported. Evergrande is the world's most indebted property developer, with over $300 billion in liabilities. It is struggling to repay bondholders, banks, suppliers, and deliver homes to buyers, epitomising a bloated industry suffering from the Chinese government's deleveraging campaign.
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Profits at China's industrial firms grew at a slower pace in November, the statistics bureau said on Monday, Reuters reported. Profits rose 9.0% on-year in November to 805.96 billion yuan ($126.54 billion), official data showed, compared with a 24.6% gain reported in October. For the January-November period, industrial firms' profits rose 38.0% year-on-year to 7.98 trillion yuan, slower than a 42.2% rise in the first 10 months of 2021. The industrial profit data covers large firms with annual revenues of over 20 million yuan from their main operations.
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Debt-laden China Evergrande Group said that the committee helping steer its massive restructuring is deploying extensive resources to help contain risks and will engage with creditors, the Wall Street Journal reported. The reassurance echoes a pledge earlier this month to work with holders of offshore debt and follows a sustained selloff in the company’s stock and bonds, with Evergrande shares recently hitting a series of record lows.
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December is poised to be a record month for Chinese offshore corporate defaults after missed payments by indebted companies including China Evergrande Group and Kaisa Group Holdings Ltd., Bloomberg News reported. Chinese firms have defaulted on a record $3.8 billion in offshore bonds so far this month, data compiled by Bloomberg show. The previous monthly high was in January when Chinese borrowers failed to repay $2.7 billion of such notes.
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China is ramping up support of the embattled real estate sector as growing stress in the industry threatens to deepen an economic slowdown, Bloomberg News reported. Authorities are encouraging banks to fund acquisitions of projects of distressed developers and pushing financially healthy property firms to make such purchases, the central bank-backed Financial News reported Monday. China is also providing credit support to an economy showing strain from the property slump, with domestic banks on Monday lowering borrowing costs for the first time in 20 months.
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Kaisa Group Holdings Ltd., which in 2015 became one of the first Chinese developers to default abroad, said it had failed to make several payments on dollar bonds as planned, and is talking to creditors about a wide-ranging restructuring plan, the Wall Street Journal reported. The move sets the stage for parallel debt workouts by two of the mainland real-estate sector’s biggest offshore borrowers, Shenzhen-based Kaisa and China Evergrande Group. Kaisa said Monday it had $11.8 billion of dollar bonds outstanding, while the tally for Evergrande is nearly $20 billion.
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