A formula is emerging for Chinese state-run firms to resolve offshore debt failures after a major commodities trader and a prominent aluminum producer imposed nearly identical losses on holders of their defaulted bonds, Bloomberg News reported. The decisions by Tewoo Group Co. and Qinghai Provincial Investment Group Co., which have since December committed the two biggest dollar-bond defaults from China’s state sector in 20 years, could offer a roadmap to investors as Beijing allows more ailing state firms to go bust.

China’s massive pile of soured debt is set to get even bigger, giving foreign investors more opportunities to try to profit from the cleanup, Bloomberg News reported. Nonperforming loans and stressed assets are likely to keep growing after reaching $1.5 trillion in 2019, according to a new study from PricewaterhouseCoopers. The mountain of soured borrowings is rising as the world’s second-largest economy opens further to foreign capital. As part of a recent trade deal, China is now allowing U.S. firms to apply for licenses to buy non-performing loans directly from banks.

China’s biggest health crisis since at least 2003 has worsened the outlook for defaults in the world’s second-biggest bond market, likely tipping a raft of distressed borrowers over the edge this year, Bloomberg News reported. With scores of millions of citizens barred from travel, and companies, factories and retail outlets shuttered for a period of weeks, strains on cash flow add an unexpected layer of stress on Chinese borrowers. Market participants had already anticipated that defaults in 2020 would be on par with 2019, which saw a second straight annual record high.

China’s banking system is facing greater risks than it seems as some bigger regional lenders are under pressure just like their smaller counterparts. “Some of the relatively larger stress-tested banks could require sizable recapitalization,” said S&P Global Ratings credit analyst Ming Tan, citing tests conducted by the People’s Bank of China, Bloomberg News reported. China’s vast network of regional banks is under pressure amid the slowest economic growth in three decades and rising loan defaults. The partially resolved trade dispute with the U.S.

Stocks in China plunged in early Monday trading as investors returned from a long holiday to the prospect of the world’s No. 2 economy virtually shut down by the coronavirus epidemic, the International New York Times reported. Stocks in Shanghai opened 8.7 percent lower, while shares in the southern Chinese boomtown of Shenzhen fell 9 percent. The markets had been closed since Jan. 23 for the Lunar New Year holiday, and government officials extended that closure until Monday while the authorities dealt with the outbreak.

Bank of China agreed to pay €3.9 million to settle a French probe into allegations it turned a blind eye as customers moved millions to their Asian accounts without paying European taxes, The Irish Times reported. The lender will pay a €3 million fine and €900,000 in damages to French tax authorities to put the criminal allegations behind it, Paris prosecutor Remi Heitz said. The case will continue against 28 business owners and intermediaries involved in transferring the funds to China, Mr Heitz said Tuesday in a statement.

India and China have been hit by a surge in consumer prices that, together with a slowdown in growth, has sparked fears of “stagflation” in the world’s two most populous countries, the Financial Times reported. If the Asian powerhouses were to be overtaken by the phenomenon — rising prices in a stagnant economy — their slowing economies would pose a grave threat to global growth. The prospect of stagflation has haunted Beijing for the past six months. China’s economic growth is at a 29-year low and consumer price inflation remains above 4 per cent.

When John Zhao sealed the £900m takeover of the UK’s PizzaExpress in 2014 he burnished his reputation as a pioneer in China’s private equity industry, the Financial Times reported. Two years later Hony Capital, his buyout firm, ploughed money into WeWork as the New York shared-office provider set its sights on an aggressive expansion in China. Both deals shared a simple premise: take well-known western brands to China and they will flourish.

The Chinese group buying British Steel has reached an agreement with trade unions over its rescue of the failed manufacturer, as it races to wrap up a takeover by the end of next month, the Financial Times reported. Executives from Jingye and union officials have reached an understanding for the basis of new employment contracts and other aspects of a turnround plan, three people with knowledge of the discussions said.

While fears over coronavirus continue to spread in China (and just now, in Taiwan), there’s news of another ailment watchers of the People’s Republic have been concerned about for the past decade: corporate debt, the Financial Times reported in a commentary…Chinese property giant Evergrande Group is paying as much as 12 per cent in its latest overseas bond issuance to raise $2 billion for debt repayment.