China

China's Bohai Steel Group said it had paid the coupon on its yuan-denominated bonds, which was due on Wednesday, and gave assurance that it had sufficient funds to pay the coupon on dollar bonds due for payment on June 17. The 6.4 percent coupon is on its 1.5 billion yuan bond . China's steelmakers are in the eye of a storm as Beijing moves to slim down bloated industries, including steel and coal, to make the economy more efficient and address a supply glut that has hammered coal and steel prices.

The International Monetary Fund has issued its sternest warning to date on the risk from China’s rising debt burden, urged more aggressive action to curb credit growth and subject state-owned enterprises to the discipline of the market, the Financial Times reported. IMF deputy managing director David Lipton presented the fund’s annual assessment of China’s economy on Tuesday in Beijing, days after a speech in Shenzhen warning of possible risk spillovers to the broader global economy. “Corporate debt, though still manageable, is high and rising fast.

China Vanke, the mainland's biggest property company by sales, said it will submit details of a proposed $9.3 billion restructuring involving subway operator Shenzhen Metro Group to the stock exhange this week, and expects to resume trading by early July, Reuters reported. Vanke's shares were suspended on the Shenzhen Stock Exchange in December and it announced the deal with Shenzhen Metro in March as its management fought to retain control of the company in a battle with its major shareholder, financial conglomerate Baoneng.

China’s corporate debt risks sparking a bigger crisis if the authorities fail to tackle it, the International Monetary Fund has warned, the Financial Times reported. It is the latest red flag over China’s ballooning debt, which rose to a record 237 per cent of gross domestic product in the first quarter on the back of massive lending designed to boost economic growth. That has put the subject to the fore of this year’s annual IMF review of the Chinese economy with a team from the Fund set to conclude its latest monitoring mission on Tuesday.

While China’s state-owned banks plot debt-for-equity swaps to cut bad loans, one struggling peer-to-peer lender has brewed up a more novel plan: repaying its investors in baijiu, the popular Chinese liquor, the Financial Times reported. Chinatou.com said last week that it was no longer able to return cash to investors following the arrest of its chairman. Instead, it pledged to pay them in baijiu produced by a connected company “to minimise the loss to investors”.

Consumer inflation in China eased in May for the first time in seven months as food prices fell, giving policy makers more room to ease monetary policy, The Wall Street Journal reported. The consumer-price index rose 2.0% in May from a year earlier, compared with a 2.3% increase in April, the National Bureau of Statistics said Thursday. The rise in the key inflation gauge undershot a median 2.2% gain economists had expected. “This gives China a lot more space to keep policy settings pretty loose,” said IG Markets analyst Angus Nicholson.

China's manufacturing activity showed signs of steadying in May but remained weak amid soft demand at home and abroad, suggesting the world's second-largest economy is still struggling to regain traction, the International New York Times reported. A rebound in March had raised hopes that China's economy was reviving, breathing life into global financial and commodity markets, but analysts said the soggy activity readings and weak April data suggest no quick recovery is in sight.

An audit of a key energy group sold by troubled state investment fund 1Malaysia Development Bhd. to a Chinese state-owned nuclear-power company flagged deep uncertainty over the company’s viability. Notes from auditor Deloitte in the 140-page financial accounts of Edra Global Energy Bhd.

A four-month rally in offshore yuan bonds has helped issuance almost double this quarter. Further gains may depend on whether China can limit currency losses and defaults, Bloomberg News reported. Offerings of yuan debt outside China jumped to 23.8 billion yuan ($3.6 billion), from 12.9 billion yuan in the first quarter that was the lowest since 2013, data compiled by Bloomberg show. The yield premium for the notes versus onshore peers has narrowed as the yuan rallied in Hong Kong to erase this year’s declines.

Kaisa Group, the Shenzhen-based property developer which defaulted on its US dollar-denominated bonds, has reached a milestone in its yearlong debt restructuring negotiations after a plan was formally approved by bondholders, the South China Morning Post reported. In a filing to the Hong Kong stock exchange on Sunday, the company said its offshore debt restructuring plan was “duly passed with the approval of the requisite majority of the Scheme Creditors,” at scheme meetings held by courts in Hong Kong and the Cayman Islands on May 20.