China

China guided its yuan currency higher on Monday, and offshore it surged against the dollar, spurred by what traders called aggressive intervention by Beijing, although Chinese stocks tumbled again as doubts persisted over policymakers’ intent, the Irish Times reported on a Reuters story. Perceived mis-steps by China’s authorities have stoked concerns in global markets that Beijing might lose its grip on economic policy, even as the country looks set to post its slowest growth in 25 years.

In a related story, the Financial Times reported in an insight that the volatility in China’s equity and currency markets in the first week of 2016 was reminiscent of August 2015, but more serious. Even though the Chinese equity market doesn’t actually matter that much fundamentally to China or to the global economy, financial policy and the drip-feed depreciation of the renminbi matter a lot. There is a rising anxiety about the credibility of policymakers and regulators, and also about the state of the economy, the reform agenda and now a looming credit crisis.

China’s financial system is “largely stable and healthy,” the country’s foreign exchange regulator said at the weekend in an effort to reassure global markets as investors braced for a possible resumption of last week’s market turmoil, the Financial Times reported. Attention is likely to focus on China’s central bank and its management of the renminbi this week, after the markets regulator appeared to stabilise last week’s stock sell-off by scrapping a controversial “circuit breaker” mechanism and extending a ban on share sales by large shareholders.

In a related story, The Wall Street Journal reported that the convulsions in China’s stock and currency markets this past week fanned investors’ worst fears: The world’s second biggest economy is in trouble and the authorities are powerless to fix it. The truth is less frightening, but still fraught. China is trying to shift economic growth to a slower, safer path, one less dependent on capital spending and debt. Chinese technocrats know that means opening to ever more market forces, but its ruling elite is still not willing to accept that loss of control.

China’s hoard of foreign-exchange reserves continued to shrink in December, recording the biggest monthly drop ever and falling overall to its lowest level in nearly three years as worries intensify over the country’s economic slowdown, The Wall Street Journal reported. With the $107.9 billion drop in December, Beijing’s foreign-exchange reserves have fallen every month but one since May. The data suggest the central bank is having to spend huge amounts of dollars to support an increasingly beleaguered yuan amid decelerating economic growth and the onset of higher U.S.

Trading was halted on China’s stock market on Thursday morning, as stocks plummeted over concerns about the country’s currency, the International New York Times DealBook blog reported. It has been a rocky start for the market in the new year, with trading volatile throughout the week. The Chinese market also closed early on Monday after stocks sank precipitously. The latest tumult is likely to add to worries about the Chinese economy and global growth. China’s currency has been falling steadily, as investors pull money out of the country and China’s economy pulls back.

China's dry-bulk shipping industry will likely see a surge in bankruptcies this year as freight rates hit record lows and the country's demand for imports wanes, consultancy Shanghai International Shipping Institute (SISI) said. A number of firms have already gone bust over the past year as the industry grapples with the worst downturn on record due to stalling demand for iron ore and coal from China and a global surplus of vessels. With benchmark freight rates now at an all-time low, finances will be further stretched for shippers.

China stocks rose on Tuesday as financial regulators and the central bank moved aggressively to restore confidence a day after a plunge roiled global markets, the Irish Times reported. Stocks fell more than 2 per cent in early trade, prompting fears that exchanges were set for a second day of panic selling after a 7 per cent dive on Monday set off a new “circuit breaker” mechanism, suspending trade nation-wide. But stocks soon moved back into positive territory thanks to a mixture of policy intervention and hard cash.

Asian markets tumbled on the first day of trading in 2016, with declines so steep in China that authorities halted all mainland trading before the end of the day, The Wall Street Journal reported. Analysts cited a number of reasons for the selling, including China’s disappointing manufacturing data, reported earlier Monday, and the coming removal of a ban on major shareholders from selling stakes, put in place during the summer stock crash. The Shanghai Composite Index fell 6.9%, its biggest decline on record for the first trading day of the year, before trading was halted.

Beijing Capital Tire Co. Ltd. (BCT), producer of the BCT, Jinglun and Autoguard brands, declared bankruptcy in October, a Chinese industry official has confirmed. According to Chinese media reports dated June 25 and Nov. 16, BCT had suspended production since early 2015 and started laying off 1,000 employees, or half of its total staff, about six months ago. BCT, an affiliate of state-owned conglomerate Beijing Capital Group in Beijing, reports having annual capacity of 7.1 million radial car, light truck and medium truck tires at two factories in the Beijing area.