China

A Chinese probe into trade financing found nearly $10 billion in fake deals, a senior official said, in the latest warning over practices that raised concern over potential losses among foreign and Chinese banks this year. The Wall Street Journal reported.

China’s four biggest banks may ease mortgage lending, the latest in a series of policy steps aimed at supporting the country’s sliding property market, the 21st Century Business Herald reported yesterday, Bloomberg News reported. Criteria for loans to first-home buyers may be eased and people who have paid outstanding mortgages may be considered eligible for first-home status, the Guangzhou-based newspaper said, citing unidentified people at Industrial & Commercial Bank of China Ltd. (601398) and Agricultural Bank of China Ltd.

China has launched a fresh effort to boost its flagging economy with cash injections by the central bank, but signs are mounting that monetary stimulus is losing its effectiveness as debt-ridden companies lose their appetite for borrowing even at low rates, the Financial Times reported. ‘Mini-stimulus’ measures launched since April have focused on increasing the supply of money and credit. Last week the central bank moved to inject $81bn into the banking system via loans to the five biggest banks.

Ultrasonic launched talks with creditors to try and avoid an insolvency and formally fired its two top executives on Thursday after they disappeared along with the Chinese shoemaker's cash, Reuters reported. Earlier this week, the German-listed firm said chief executive Qingyong Wu and chief operating officer Minghong Wu had gone missing at the weekend, and most of its cash reserves in China and Hong Kong had vanished.

The world's second-largest economy is faring worse than previously thought, with government stimulus measures proving too short-lived to counter China's sharp real-estate downturn or to prop up flagging factory output, The Wall Street Journal reported. The latest indicator of China's deceleration came over the weekend with a sharper-than-expected drop-off in industrial production for August to 6.9% year-over-year, the slowest pace since 2009, during the global financial crisis.

Housing sales in China in the first eight months of the year fell 10.9% to 3.43 trillion yuan ($559 billion), according to data from the National Bureau of Statistics issued Saturday, The Wall Street Journal reported. Sales in the first seven months of the year were down 10.5% from a year earlier at 2.98 trillion yuan. Property developers across the country have been struggling with weak sales, bulging inventories and tight credit conditions since the start of the year, and some authorities, mostly at the local level, have been loosening policies to support the sluggish market.

Li Keqiang, Chinese premier, has assured global investors they are still welcome in China and said a rash of recent fines and regulatory investigations into their businesses were not specifically targeting them, the Financial Times reported. Mr Li’s comforting words to global companies, made on Wednesday at the World Economic Forum in Tianjin, came as revised government figures showed that, in 2013, outbound Chinese investment exceeded $100bn for the first time.

Major private shipbuilder China Ronsgsheng Heavy Industries Group looks like its fate is being forced upon it with upcoming government intervention, SeatradeGlobal reported. The group had suspended its shares last month and flagged that a potential announcement relating to restructuring was imminent.Over the weekend, made a further announcement that it had been "notified by a government authority that they are procuring an independent third party to consider and, if appropriate, to initiate a potential restructuring involving Jiangsu Rongsheng Heavy Industries".

Will rising defaults and stricter rules halt the breakneck growth of China’s shadow banks? When one of the country’s many trust companies, which sell high-yield investments, warned earlier this year of a looming default on one of its products, its clients reacted with anger and the wider market with alarm, The Economist reported. As panic spread, regulators orchestrated a bail-out of the product, reassuringly named “Credit Equals Gold #1”. But in recent weeks investors in its sibling, “Credit Equals Gold #2”, have met a crueler fate.

Growth in China’s vast factory sector slackened in August as foreign and domestic demand slowed, surveys showed Monday, stoking speculation that further stimulus measures would be needed to prevent the economy from stumbling, the International New York Times reported. At the same time, surveys of purchasing managers across Asia told a tale of fewer new orders and faltering exports, but with brighter spots like India and Taiwan.