China

Chinese shipper Sinotrans Ltd. said Wednesday that the board of Grandstar Cargo International Airlines, a freight forwarder jointly owned by a unit of Sinotrans and Korean Air Lines Co., has approved plans to liquidate the carrier amid mounting losses and lackluster prospects in the air-freight market, The Wall Street Journal reported. Sinotrans said Grandstar Airlines, which has already suspended flight operations, had a net loss of 340.1 million yuan dollars ($53.8 million) in 2011, widening from losses of 20.7 million yuan in 2010 and 94.3 million yuan in 2009.

Sino-Forest Corp said on Wednesday it is reviewing fraud charges leveled against it by the Ontario Securities Commission and considering what steps, if any, it ought to take in response to the allegations, Reuters reported. The embattled Chinese forestry company, whose stock imploded last year in the face of fraud allegations, said the regulator is seeking penalties of up to C$1 million for each alleged failure by the company to comply with Ontario securities law. The OSC, Canada's most powerful securities regulator, is also seeking to permanently halt trade in shares of Sino-Forest.

Canada's largest securities regulator alleged Tuesday that Sino-Forest Corp. and certain former executives inflated timber purchases and sales, capping an 11-month investigation into the troubled forest-products company, The Wall Street Journal Deals & Deal Makers blog reported. The Ontario Securities Commission signaled last month it would file fraud allegations against the company, after issuing a so-called enforcement notice. A spokesman for Sino-Forest, which conducts most of its business in China, declined to comment.

The Chinese official was adamant the city of Weifang would keep its rayon factory open, noting that local authorities had just stepped in to help the plant's owner repay $60 million in commercial paper, Reuters reported. The bailout averted what would have been China's first ever bond default and was good news for domestic bond investors, who were reassured that in China even mid-sized state-owned firms can count on "too-big-to-fail" treatment.

When growth in China's economy slows, government leaders typically call on state-owned banks to make loans to rev up activity. But that tactic may not work this time, The Wall Street Journal reported. Bank lending plunged in April, according to the People's Bank of China, and has remained weak in May, bankers and borrowers said. The decline owes to companies being wary about borrowing when demand is uncertain and profits are evaporating.

The Chinese economy is in a lot more trouble than headline GDP figures have indicated until now, the Financial Times reported. Less closely watched economic data released in recent days, including figures for electricity, rail cargo and bank loans, have all shown a steep drop in activity that appears to have caught policymakers by surprise. China’s GDP statistics are only released every three months and in the first quarter of this year they appeared to show a continuation of the gradual decline that has been under way for the past year.

Some immigration lawyers have seen a new increase in the number of Chinese seeking foreign citizenship, a trend they suggest is tied to worries about political turmoil and economic slowdown in China, especially among businesspeople and politicians seeking to protect their families and wealth, The Wall Street Journal reported. The recent interest builds on a trend of growth in applications from Chinese seeking to emigrate to places like the U.S., Canada and the U.K.

China's Hony Capital plans to sell or outsource the operations at Elpida Memory's Hiroshima DRAM plant to Semiconductor Manufacturing International Corp (SMIC) if its bid for the bankrupt Japanese chipmaker is successful, the Nikkei business daily said on Tuesday. The scenario involving Hony, which is bidding along with fellow private equity firm TPG Capital, and China's top chipmaker, was drawn up by the Chinese government, the Nikkei said citing a banking source, and is one of a few being mentioned surrounding the takeover of Elpida.

Veteran investor Jack Rodman has had enough. After waiting 11 years for China to sell its rising pile of bad bank loans, he is quitting and going to Spain instead. His pull-out exposes a pressing failing in China's booming financial sector: it does not properly dispose of a growing store of bad loans from banks' profligate lending, keeping risks pent up within the world's second-biggest economy, Reuters reported in an analysis.

The Chinese government is pushing in two directions as it seeks to slow price growth while avoiding a collapse. It’s lowering borrowing costs for first-time homebuyers to encourage purchases while Premier Wen Jiabao keeps curbs in place to stem the speculators who have helped drive home prices up by as much as 140 percent since 1998, Bloomberg reported. China’s 18 percent first-quarter drop in home sales contributed to the slowest economic growth in almost three years.