China is cranking up its massive export machine again, and this time there’s nowhere for competitors to hide, the Wall Street Journal reported. A Massachusetts startup called CubicPV bet on silicon wafers, a high-tech component in solar panels. Buoyed by President Biden’s climate legislation enacted two years ago, with billions of dollars in tax credits and government loans, CubicPV announced plans in late 2022 for a $1.4 billion wafer plant in Texas. Since then, China has nearly doubled its output of silicon wafers, way more than it needs.
Read more
PwC China has informed its clients it expects a six-month business ban by Chinese authorities as early as September as part of punishment for its audit of collapsed property developer Evergrande, the Financial Times reported. The ban would prevent it from signing off on financial results and initial public offerings and from conducting other regulated activities, the report stated, citing multiple clients. PwC has been under scrutiny for its role in auditing Evergrande since the troubled property developer was accused in March of a $78-billion fraud, leading to an exodus of clients.
Read more
China told some trust companies to stop raising money from individuals to fund local government financing vehicles in its latest effort to curb growing financial risks, Bloomberg News reported. The National Financial Regulatory Administration (NFRA) recently banned some lower-rated trust firms from selling wealth products underpinned by LGFVs on concerns of potential defaults. It’s unclear how many of China’s 67 trust firms received below-par ratings in the watchdog’s latest assessment.
Read more
Chinese property developer Kaisa Group Holdings said it has made significant progress in restructuring its offshore liabilities, enabling the beleaguered company to offer billions of dollars in new debt and convertible bonds, the Wall Street Journal reported. The company has entered into a restructuring support agreement with its debtholders, under which Kaisa will issue $5.0 billion of notes in six tranches and $4.8 billion of mandatory convertible bonds in eight tranches, the developer said Tuesday.
A mainland Chinese court accepted a liquidation application filed against a China Evergrande Group unit earlier this month, triggering a formal legal process that ratchets up the pressure on the defaulted developer to either restructure or face liquidation in its main base of operations under a worst-case scenario, Bloomberg News reported. The Intermediate People’s Court of Guangzhou City, where Evergrande is based, accepted the application filed against Guangzhou Kailong Real Estate as of Aug. 9, according to a Hong Kong stock exchange filing late Monday.
Read more
China is considering a new funding option for local governments to buy unsold homes after a series of rescue packages failed to prop up the market, Bloomberg News reported. The latest proposal would allow local governments to fund their home purchases by issuing so-called special bonds, the proceeds of which are currently restricted to uses including infrastructure and environmental projects.
Read more
The European Commission on Tuesday proposed final duties of up to 36.3% on imported electric vehicles made in China, as part of the highest profile EU probe of alleged Chinese subsidies which has provoked threats of retaliation from Beijing, Reuters reported. It has also launched investigations into whether Chinese clean tech producers are dumping subsidised goods on EU markets and whether Chinese-owned companies unfairly benefit from subsidies while operating inside the European Union. The EU executive says its aim is to prevent unfair competition and market distortion.
Read more
A bankruptcy filing against a Guangzhou-based unit of collapsed developer China Evergrande has been accepted by a mainland China court, according to a filing with the Hong Kong stock exchange, the South China Morning Post reported. A court in the southeastern Chinese city accepted a bankruptcy liquidation application filed against Guangzhou Kailong Real Estate, an indirect wholly owned subsidiary of the world’s most indebted developer, on August 9, the liquidators of Evergrande said in the filing on Monday.
Read more
China’s central bank said a meeting in Shanghai produced an agreement with the U.S. Treasury to appoint contact people to deal with any future “financial stress events,” Bloomberg News reported. The two sides also “exchanged lists of financial stability contacts” during the fifth meeting of the so-called Financial Working Group that was set up following Treasury Secretary Janet Yellen’s visit to China last year.
Read more
China's factory output slowed for a third straight month in July, showing that the recovery in the world's second-largest economy was losing steam, although the battered consumer sector perked up slightly as stimulus targeting households took effect, Reuters reported. A mixed batch of data on Thursday pointed to a patchy start to the second half for the $19 trillion economy and gave policymakers continued cause for concern following dismal export, prices and bank lending indicators earlier this month.