China

Beijing has stepped up its battle against bad debt in China’s banking system, with a state-led debt-for-equity scheme surging in value by about $100bn in the past two months alone, the Financial Times reported. The government-led programme, which forces banks to write off bad debt in exchange for equity in ailing companies, soared in value to hit more than $220bn by the end of April, up from about $120bn at the start of March, according to data from Wind Information.

China is joining an international effort to tackle tax evasion, with plans to require multinationals to disclose more detailed information on their overseas affiliates, according to taxation consultants who advised the government on the new rules, The Wall Street Journal reported.

Xi Jinping has called for the Communist Party to “resolutely push forward supply-side structural reform,” the People’s Daily reported Monday. Last week the Party mouthpiece carried two manifestos for reform, an interview with an anonymous “authoritative person” and the transcript of a speech by President Xi. The paradox of the Xi agenda is that he wants to use China’s Leninist system of political control to drive more free-market reform. Mr.

Massive overcapacity in China's steel industry is not yet falling, a vice minister said on Monday, as the country's leading steel companies conceded that current output was unsustainable and blamed the restart of mills previously shut, the International New York Times reported. China is facing anger and calls for trade penalties to block its exports by global rivals, who say it is dumping cheap exports after a slowdown in demand at home.

China’s central bank is investigating the accuracy of non-performing loans (NPLs) data at banks, people with direct knowledge of the matter told Reuters on Monday. The development underlines policymakers’ concerns about rising debt in the country. Specifically, the central bank’s financial stability bureau is investigating whether any NPLs have been miscategorised as normal loans or special mention loans, referring to debt at risk of default, according to two sources who saw a central bank notice on the issue.

Implicit guarantees are ubiquitous in China, but one company went a step further when it appealed to the central bank to give an explicit reassurance to creditors that the government will not permit any default, the Financial Times reported. China City Construction Holding Group Co saw yields on its Hong Kong-traded “dim sum” bonds spike recently after a surprise privatisation, highlighting the ways moral hazard distorts capital allocation in the world’s largest economy.

China’s run of disappointing April data underscore the bind facing policy makers seeking to cut capacity from the worst-performing sectors and curb credit excesses in recovering ones without stalling the economy. Bloomberg’s monthly gross domestic product tracker shows growth slowed to 6.88 percent in April, from 7.11 percent in March. Weak steel and coal output dragged on industrial production, which increased 6 percent from a year earlier versus economists’ forecasts of 6.5 percent, while retail and investment readings also disappointed, according to reports released on Saturday.

Ao maybe George Soros was on to something after all, the Financial Times reported in an insight. On Monday the People’s Daily, the Chinese Communist party’s flagship newspaper, published a front-page interview with an “authoritative figure” who warned that the country’s soaring debt levels could lead to “systemic financial risks”. The last time the People’s Daily made such a splash was in January, when its overseas edition took Mr Soros to task for allegedly shorting the renminbi.

China is awash in a credit stimulus that is bigger as a proportion of GDP than the one that Beijing unleashed to haul the economy out of trouble in the aftermath of the 2008/2009 financial crisis. But this time around, the deluge is failing to boost growth in an economy already saturated with liquidity, a new statistical study shows, the Financial Times reported.

China Minmetals Corp, the country's biggest metals trader, is raising 15 billion yuan ($2.3 billion) from investors to help restructure and list its financial assets, according to a fundraising document seen by Reuters. Minmetals-controlled Kingray New Materials Science & Technology, a loss-making electrical components maker, is seeking to issue shares to a Minmetals Corp subsidiary, China Minmetals Corp Ltd, to acquire all of Minmetals Capital Holdings, which owns the metals trader's financial assets, the document shows.