China

China etched in details of plans to help workers laid off from the bloated coal and steel industries, saying assistance would include career counseling, early retirement and help in starting businesses, among other measures, The Wall Street Journal reported. New guidelines released by seven Chinese ministries over the weekend build on previously announced commitments to restructure the coal and steel industries, whose excess production is dragging on the economy, and to take care of an estimated 1.8 million workers who will be displaced.

China and India are both grappling with escalating bad debt challenges lurking in their banking systems. Yet the two Asian economic giants are embracing markedly different strategies to clean up the mess, Bloomberg News reported. Impaired loans have reached a decade high in China and are at their most in 14 years in India, posing a threat to two economies that increasingly have fueled global growth. Troubled banking systems hurt economies by curbing new lending for corporate investment.

China Railway Materials Co., a government-backed company that halted trading of its bonds earlier in the week, said Wednesday it’s seeking to restructure its debt, Bloomberg News reported. The supplier of steel and cement for railways held a meeting with 19 lenders on April 5, according to a Wednesday company filing. China Railway reported on its operating and financial conditions in the meeting, the filing said, without giving details of the meeting result. As Premier Li Keqiang pushes through reforms, many bloated state firms have stumbled in the debt market.

Small investors, angry over lost savings, are emerging as a new security threat to Chinese authorities, who are watching warily as investors around the country hit the streets in protest and picket government offices to demand their money back, The Wall Street Journal reported. Protests have flared from Shanghai to the southwestern hub of Kunming to the ancient former capital of Xi’an. Crowds gathered outside the securities regulator’s Beijing offices after equity markets collapsed last summer.

Chinese courts have ordered cash-strapped Shandong Shanshui Cement Group Ltd to pay back its creditors 2.4 billion yuan ($372 million), the company said in a statement posted on the Shanghai Clearing House website on Tuesday, Reuters reported. The company said it was unlikely to be able to make the required payments due to financial difficulties, and the courts would take steps such as auctioning off the firm's assets to meet these obligations.

China rattled markets around the world last year when vast sums of money began flowing out of the country. Estimated at nearly $1 trillion, the money flows represented growing skepticism that China would be able to fix its deep problems and resume its place as a driver of global economic growth. Doubts remain about Beijing’s ability to rev up slowing growth and patch up its frayed financial system. But new data suggests China has stanched, at least for now, the flow of money that had been pouring out of the country, the International New York Times reported.

When it comes to analyzing China's economy, few topics polarize views like the nation's debt levels, Bloomberg News reported. By some accounts, borrowing is out of control and has the country teetering on the edge of a crisis. Others point to the nation's long list of assets, which can more than offset any funding crunch. An example of the opposing views was on display when two separate April 5 research reports each cited the risk of a "Minsky moment" (a collapse in asset prices following the exhaustion of credit expansion) but both came to very different conclusions.

Standard & Poor’s, the ratings agency, has cut its outlook on China’s government credit to ‘negative’ from ‘stable’ as it believes rebalancing of the world’s second largest economy would take place more slowly than expected, the Irish Times reported. China’s credit rating is AA- with a negative outlook, S&P said on its website. The agency also affirmed the long-term and A-1+ short-term sovereign credit ratings for China.

A thrifty Asian powerhouse saves and invests its way to economic stardom, inspiring admiration and paranoia in the rich world. The powerhouse begins to lose momentum, driving its corporations to switch their investment appetites towards assets abroad. But, lacking worldly experience, the corporations bungle. Billions in hard-earned national savings disappear down a black hole.

China’s economic collapse no longer seems imminent. The Wall Street hedge funds who bet against the Chinese currency have taken heavy losses and battered stock markets are stabilizing, The Wall Street Journal reported. In fact, collapse was never in the cards. Over the short term, as Beijing has demonstrated, it has enough financial firepower left to fight off threats to stability and prevent the economy from stalling. It’s time to worry about something much more likely: political failure.