China

China is exploring a new way to grapple with its mounting pile of bad corporate debt, though its top central banker sought on Saturday to dispel worries that the plan would simply shift the burden to other parts of the country’s vast economy, the International New York Times reported. Under the tentative proposal, Chinese officials would allow banks saddled with growing quantities of bad loans to sell that debt to investors, said Zhou Xiaochuan, the governor of the People’s Bank of China.

Factories and retailers in China put in weaker-than-expected performances in the first two months of the year, as anemic demand and excess capacity continued to bear down on the world’s second-largest economy, The Wall Street Journal reported. Industrial production grew 5.4% in January and February compared with a year earlier, down from December’s 5.9% pace, according to government data released Saturday, and just below the 5.6% forecast by economists polled by The Wall Street Journal.

A new approach to managing China’s corporate debt burden may offer temporary relief for banks but spell further difficulties for the country’s economy: having deeply troubled companies use stock to pay overdue loans, the International New York Times reported. Early evidence of the strategy emerged late Thursday, when a heavily indebted Chinese shipbuilder disclosed that it would issue equity to its creditors, instead of repaying $2.17 billion in bank loans.

Migrant workers are the unsung heroes of China’s economic miracle. Numbering more than 270 million, they abandon their impoverished farms and villages to move to the cities, where they run the factories and build the highways and high-rises that have made China’s growth the envy of the world, the International New York Times reported. Now, as China’s economy slows, the country’s leaders have a new mission for them: Buy homes. China is looking for ways to get migrant workers to help buy up a huge glut of unsold homes that is dragging down the country’s economic growth.

Chinese officials are trying anew to slow a money exodus from the country, clamping down on individuals seeking to flee the yuan and making life tougher for companies that need to trade the currency for dollars to do business, The Wall Street Journal reported. China’s foreign-exchange regulator in recent months has deployed a new system to monitor individual purchases of foreign funds and has asked banks to reduce foreign-currency transactions.

China’s central government will take over some of local authorities’ debts in a move to help them regain footing and to allow Beijing to cut business taxes, The Wall Street Journal reported. Key to the Chinese leadership’s economic agenda this year is to slash taxes and debt loads for companies, leaving firms with more funds to invest and innovate as Beijing looks to entrepreneurs to help drive growth. But lowering taxes has long been a difficult pill for local officials to swallow, since they see spending-induced growth as crucial to their survival.

The head of China’s top economic-planning agency Sunday rejected suggestions the Chinese slowdown was dragging on global growth and markets, saying the world’s second largest economy continues to be a source of demand and vitality, The Wall Street Journal reported. National Development and Reform Commission chief Xu Shaoshi cited the 6.9% growth the economy clocked last year and the high volume of commodities it is importing as among the contributions China is making to global economic health. Even as the government is lowering its growth target for the slowing economy, Mr.

It looks like subprime derivatives on steroids: China hopes to bundle together billions of dollars’ worth of non-performing loans and eventually sell them to global investors, the Financial Times reported. Such a massive securitisation programme would represent the latest tactic in China’s campaign to lift one of the biggest shadows cast over its slowing economy — a debt pile that is as big as 230 per cent of GDP. It would whittle back debts at Chinese banks and move some of the risk outside the domestic financial system.

Moody’s, the ratings agency, has cut its outlook on China’s government credit to ‘negative’ from ‘stable’ on the back of a growing debt burden in the world’s second largest economy, and the challenges of reform, the Irish Times reported. In a report issued days before China’s leaders gather to approve the latest Five-Year Plan for the economy at the National People’s Congress, Moody’s uncertainty about Beijing’s capacity to implement widescale reforms to address imbalances in the economy.

The Chinese central bank, says Gov. Zhou Xiaochuan, is “neither a god nor a magician.” He was responding, in a written interview published by financial magazine Caixin, to complaints that Chinese financial authorities lack the communications skills needed to calm international investors. After months of silence while global markets went into convulsions over uncertainty about China’s currency policies, Mr. Zhou said, “There is no way we can wipe out all uncertainties.” The defensiveness is understandable. Here’s the problem: Mr.