China

China’s central bank is striking out on its own with signals of tighter monetary policy, widening a divergence with other large economies that will shape global capital and trade flows next year, Bloomberg News reported. With most of the world’s major nations still battling the pandemic and struggling to recover from deep recessions, China’s economy is on track to grow by about 2% this year and more than 8% in 2021.

China has suspended one of its top credit rating agencies after a former executive was accused of taking “massive” bribes, as a growing pile of defaults rattle the country’s $4tn corporate debt market, the Financial Times reported. The China Securities Regulatory Commission announced on Tuesday that it was temporarily freezing the licence of Golden Credit Rating and had forbidden the agency from taking on new business for three months. The move came as Shandong Ruyi, China’s largest textile manufacturer, looked set to default on a second bond in as many days.

China’s central bank made its biggest ever injection of medium-term funds on Tuesday to shore up liquidity, after recent corporate bond defaults shattered investor confidence and scuppered new issuances, Reuters reported. The People’s Bank of China (PBOC) said in a statement it had issued 950 billion yuan ($145 billion) worth of one-year medium-term lending facility (MLF) loans to financial institutions to keep the “banking system liquidity reasonably ample”. It kept the interest rate unchanged for an eighth straight month at 2.95%.

China’s central bank is likely to inject cash into the financial system Tuesday, helping lenders with their year-end liquidity needs, Bloomberg News reported. With some 600 billion yuan ($92 billion) of one-year loans maturing in December, the People’s Bank of China is expected to offer as much as 800 billion yuan in funding to banks, according to Huachuang Securities Co. That would be the fifth straight month of net injections via the medium-term lending facility.

The Chinese clothing maker that controls brands including The Lycra Company and Gieves & Hawkes revealed on Monday that it had failed to pay back investors on a $153m bond, the latest in a string of defaults in the country, the Financial Times reported. Shandong Ruyi Technology Group, which has struggled to cope with a heavy debt load after a series of high-profile international acquisitions, said in a filing that it had failed to repay the principal and interest on a Rmb1bn bond that came due on Monday.

Chinese stocks suffered their worst weekly decline since September, as concern over high valuations and the tightening supply of cash weighed on the market, Bloomberg News reported. The CSI 300 Index dropped 1% Friday, extending this week’s loss to 3.5%. That’s the worst performance among global benchmarks. Brokerages -- whose shares are typically an indicator of investor sentiment -- have suffered some of the biggest losses in the past five sessions. A gauge of financial stocks slumped 5.4% this week, the most since state media criticized one of China’s most popular stocks in mid-July.

Shares in Chinese retailer Suning.Com Co Ltd hit a more than 10-year low, amid lingering worries over its liquidity condition despite efforts by the company to shore up investor confidence, Reuters reported. The stock fell as much as 7.5% to 8.03 yuan in early morning trade, its lowest since November 2014, having dropped nearly 20% this year. The retreat came after shareholders of Suning Holdings Group, which owns a 3.98% stake in Suning.Com, pledged all of the group’s shares to Alibaba’s Taobao (China) Software Co., Ltd on Dec.

Chinese government entities responsible for funding hundreds of billions of dollars in infrastructure projects are struggling to raise cash after a series of defaults by state groups rocked the country’s credit markets, the Financial Times reported. Executives from several local government finance vehicles (LGFVs) have told the Financial Times that they have abandoned bond sales or loan applications after debt-saddled state-owned enterprises, led by Yongcheng Coal & Electricity Holding Group, defaulted in November. Other LGFVs are paying much higher rates of interest to borrow.

China’s Unigroup International Holdings Ltd said Thursday that it was unable to repay a maturing $450 million bond by a Dec. 10 deadline, triggering cross defaults on dollar bonds worth an additional $2 billion, Reuters reported. In a statement on the website of the Hong Kong stock exchange, Unigroup International said neither it nor its guarantor Tsinghua Unigroup International Co Ltd would be able to make the principal or the final interest payment on the maturing bond.

A top Chinese chipmaker’s deepening bond crisis is sending a fresh signal that Beijing is willing to let ailing state-linked firms fail in order to instill stronger financial discipline into a recovering economy, Bloomberg News reported. Tsinghua Unigroup Co. said it won’t be able to repay the principal on a $450 million dollar bond due Thursday, which would trigger cross defaults on a further $2 billion of debt. This would be the company’s first dollar bond repayment failure and came after it defaulted on a 1.3 billion yuan ($199 million) local bond last month.