China

High on the Chinese government’s priority list is building leaner, more competitive state companies, The Wall Street Journal reported. But the dismal earnings reported by national oil giants in recent days underscore the difficulties in meeting that goal. These companies are maintaining large workforces even as Western peers continue to slash payrolls in response to the collapse in oil prices. The listed units of China’s big three oil companies reported sharply lower earnings for 2015.

The southern Chinese city of Shenzhen has raised deposit requirements for some home buyers, the latest in a series of measures being introduced across the country to calm property markets, according to the official Xinhua news agency, the Irish Times reported. Authorities in Nanjing, in the eastern coastal province of Jiangsu, issued similar measures on Monday, underlining how the government’s tightening campaign has spread to more “second tier” cities.

The debt restructuring of a leading Chinese steel company has caught the attention of the market in what some analysts see as a landmark case for reform of the troubled sector, the South China Morning Post reported. Bohai Steel, a steelmaker based in northeast China Tianjin is struggling with debt of 192 billion yuan (HK$228.96 billion). Analysts believe the lack of a government bailout may signal China’s desire to develop a test case for other loss-making state-owned enterprises and local governments to follow.

The Asian Infrastructure Investment Bank shouldn’t be seen as an attempt to upend existing multilateral development lenders, nor should it be a hot spot for conflict between China and the U.S., the AIIB president said Friday, The Wall Street Journal reported. The Beijing-based infrastructure bank, which was conceived as China’s answer to the World Bank and the Asian Development Bank, has faced skepticism, particularly from the U.S., over how it is managed and whether it has a political agenda to advance Beijing’s interests.

Confronted with a plunge in its stock markets last year, China’s central bank swiftly reached out to the United States Federal Reserve, asking it to share its playbook from dealing with Wall Street’s “Black Monday” crash of 1987, the International New York Times reported on a Reuters story.

China’s central bank governor has warned that the country’s corporate debt levels are too high and are stoking risks for the economy, just as highly-leveraged Chinese companies have gone on an overseas takeover binge, the Financial Times reported. Adding his voice to a recent chorus of concern by senior Chinese officials, Zhou Xiaochuan, governor of the People’s Bank of China (PBoC), told global business leaders meeting in Beijing that the ratio of lending to gross domestic product was becoming excessive.

Here is a lesson on how Chinese debt restructurings play-out: the debtor comes out on top, The Wall Street Journal reported. Embattled Chinese property developer, Kaisa Group, which defaulted on $2.5 billion of bonds almost a year ago announced late Thursday it had made amends with its two dissenting creditors, Farallon Capital Asia and BFAM Partners. The long-drawn-out restructuring is effectively done, barring procedural court approval processes.

Chinese Premier Li Keqiang on Wednesday warned that a “dysfunctional” real economy is the biggest threat to financial markets as he vowed to press on with industry restructuring while maintaining economic growth rates of 6.5-7 per cent, the Financial Times reported. Speaking at the end of China’s annual parliamentary meeting, Mr Li sought to reassure an anxious public that Beijing still has the firepower to meet its financial commitments despite economic ructions.

A protest by Chinese coal workers over unpaid wages drew a swift, expected response: payoffs to get them off the streets and threats of police action if they don’t. The effort underscores the government’s long-standing worries about labor strife and its newly cautious approach to restructuring unprofitable state firms, The Wall Street Journal reported. Unrest in the northeastern city of Shuangyashan appeared to ease as Longmay Mining Holding Group Co., a huge employer, started disbursing some back pay on Monday, workers said.

Chinese authorities are seeking to crack down on a surge of unregulated lending that is pushing up property prices in the country’s biggest cities, before it wreaks damage to the wider economy, the Financial Times reported. In comments at the weekend Zhou Xiaochuan, head of the People’s Bank of China, denounced loans for down payments on homes as illegal. Pan Gongsheng, a central bank vice-president, said regulators will act against the peer-to-peer companies that grant such loans.