Countries that once avoided upsetting Beijing are moving closer to the U.S.’s harder and largely bipartisan stance—to curb Chinese access to customers, technology and sensitive infrastructure, the Wall Street Journal reported. Australia, economically dependent on China, became one of the first countries to block Huawei Technology Co. on its soil, and led global calls for an investigation into China’s initial handling of the coronavirus. India, once a pillar of the world’s nonaligned movement, is expanding military cooperation with the U.S.
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Chinese banks are expected to face headwinds raising funds next year as profit-conscious investors cling to the sidelines, expecting a wave of bad loans to hammer the sector and erode already slimming margins, Reuters reported. The sector is ending its worst annual performance in years after putting aside record provisions due to COVID-19 while Beijing urged banks to sacrifice profits to help the economy.
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Chinese financial regulators moved to rein in Ant Group Co., the financial-technology giant controlled by billionaire Jack Ma, telling it to switch its focus back to its mainstay payments business and rectify problems in faster-growing areas such as personal lending, insurance and wealth management, the Wall Street Journal reported. China’s central bank on Sunday criticized Ant for its behavior toward competitors and consumers, and what regulators said was problematic corporate governance.
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China’s central bank will scale back support for the economy in 2021 and cool credit growth, but fears of derailing a recovery from a pandemic-induced slump and debt defaults are likely to prevent it from tightening any time soon, policy sources said, Reuters reported. This expands on a theme recently outlined at China’s annual Central Economic Work Conference to plan for 2021, where leaders said the country would keep its proactive fiscal policy and make monetary policy flexible and targeted.
China’s banking and insurance regulator said on Thursday it has approved the opening of China Galaxy Asset Management Co., Ltd, the fifth asset management company in the country that will mainly deal with bad loans and toxic assets nationwide, Reuters reported. Chinese banks are braced for rising bad debt in the coming months as policies designed to give borrowers breathing space on loans during the coronavirus crisis expire.
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.