A Chinese court has ruled that HNA Group's corporate management was "highly mixed up" and more than 300 of its affiliates did not function as independent companies, Nikkei Asia reported. The People's High Court of Hainan Province in the civil case involving the once highflying conglomerate also decided to treat the group as a single entity in its bankruptcy proceedings going forward. The court disclosed late on Monday that it would pursue the restructuring procedures by consolidating the parent HNA Group with 320 of its affiliates.
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Chinese economic activity surged in the first two months of 2021 when compared with the same coronavirus-battered period last year, though the picture was less rosy when weighed against growth momentum in the final months of 2020, the Wall Street Journal reported. Economic data released Monday by China’s National Bureau of Statistics showed industrial production, consumption, investment and home sales in January and February all jumping by more than 30% from the same period a year earlier, when the Chinese economy was largely shut down to contain the fast-spreading coronavirus.
China is stepping up the bankruptcy process of heavily indebted companies as the leadership of the Chinese Communist Party tries to demonstrate its crisis management before the party congress in 2022, Nikkei Asia reported. Travel conglomerate HNA Group and five other major heavily indebted companies with ties with the government have liabilities totaling 1.8 trillion yuan ($277 billion). A high court in Hainan Province announced on Wednesday that more than 300 companies under the wing of HNA will go into a bankruptcy process called "chong zheng,"a type of corporate rehabilitation.
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Chinese regulators attempting to rein in Ant Group Co. and a swelling online-lending industry have a target in their sights: the excessive, debt-fueled lifestyles of the country’s youth, the Wall Street Journal reported. Leading up to last year’s coronavirus pandemic, a new generation of tech-savvy and free-spending citizens helped power rising consumption, a growing driver of China’s economy. Many used short-term loans to pay for expenses such as prestige cosmetics, electronic gadgets and costly restaurant meals.
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Under founder Jack Ma, Alibaba Group Holding Ltd. had regulators and local officials in its corner as it grew into a Chinese version of Amazon.com Inc. Chinese President Xi Jinping’s recent crackdown on the empire of China’s best-known entrepreneur has put an end to that, the Wall Street Journal reported. Since late last year, Alibaba has been in Beijing’s crosshairs, along with its financial affiliate Ant Group Co. Regulators already have come down hard on Ant, which they consider a risk to the financial system, forcing it to make changes that will severely hamper its prospects.
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Two developments in the China Fishery Chapter 11 bankruptcy filing have given William Brandt, the trustee overseeing the sale of the company’s Peruvian assets, hope that he will get a deal done, Seafood Source reported. On 19 February, Brandt filed a proposed settlement agreement with China Fishery Group’s court-appointed liquidator, FTI Consulting, which had sued the company, arguing it had used ill-gotten earnings to purchase Copeinca in 2013.
China will put financial institution bankruptcy laws on its legislative agenda for the first time, according to a report by the top legislative body released on Monday, Reuters reported. The absence of a legal bankruptcy framework for Chinese financial institutions has prevented technically insolvent firms from exiting the market effectively. A slew of laws will be revised including the Enterprise Bankruptcy Law in the five-year legislative programme, said the report, signed off by Li Zhanshu, chairman of the standing committee of the National People's Congress, or parliament.
China’s chief banking regulator warned about rising risks from the country’s property sector and from global financial markets, underscoring Beijing’s focus on risk controls after a robust pandemic recovery, the Wall Street Journal reported. Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, told reporters in a briefing Tuesday that he was concerned about what he called a “bubble” in Chinese real-estate prices, which he said could threaten the country’s financial sector and its broader economy.
China is set to reduce local government bond sales and rein in its budget deficit this year, scaling back the pandemic stimulus measures that fueled debt while helping the economy recover, Bloomberg News reported. The government is likely to reduce its quota for special local bonds -- mostly used for infrastructure spending -- to 3.5 trillion yuan ($541 billion) from 3.75 trillion yuan last year, according to the median estimate of 10 economists surveyed by Bloomberg. The fiscal deficit target is forecast to be cut to 3% of gross domestic product from 3.6% in 2020.
Chinese bondholders are gaining more power in the corporate restructuring process, underscoring a renewed push by authorities to reform the nation’s $5.2 trillion credit market, Bloomberg News reported. Following a slew of defaults late last year that rattled markets, disgruntled creditors have successfully pushed for borrower concessions that would have seemed out of reach in China only a year ago.
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