China

Chinese regulators have hit another firm with disciplinary action as they keep cracking down on high-frequency trading as part of efforts to stabilize equities markets, the Wall Street Journal reported. The China Financial Futures Exchange said late Wednesday that Shanghai Weiwan Fund Management recently used high-frequency trading in stock futures to circumvent the trading-limit system trade, making 8.9 million yuan ($1.2 million) in profits. The profits have been confiscated and Shanghai Weiwan is barred from trading for one year, the exchange said.

Chinese developer Country Garden said on Wednesday a liquidation petition has been filed against it for non-payment of a $205 million loan, clouding its debt revamp prospects and undermining Beijing's effort to restore confidence in the property sector, Reuters reported. Country Garden said in a regulatory filing to the Hong Kong Stock Exchange that it would "resolutely" oppose the petition, which was filed by a creditor, Ever Credit Limited, a unit of Hong Kong-listed Kingboard Holdings. A court hearing had been set for May 17.

China's securities regulator said on Friday it would mete out increasingly tough penalties on fraudulent listings, accounting scams and misappropriation of funds by big shareholders, as part of a crackdown to boost confidence in the stock market, Reuters reported. In its first news conference since the appointment of a new chairman, the China Securities Regulatory Commission (CSRC) also said it would target insider trading and market manipulation more precisely, removing regulatory blind spots.

The U.S. and China are discussing new measures to prevent a wave of emerging market sovereign defaults, one of the most significant attempts in years at economic cooperation between the rival superpowers, Bloomberg News reported. The talks — including ways to preemptively extend loan periods before countries miss payments — are broadly aimed at both easing the $400 billion-plus annual debt service burden for poor countries and finding an alternative to the high borrowing rates those nations now face in the market.

The number of foreclosed properties for sale in China rose at a faster pace in January, in a sign of the country’s continued economic slowdown, Bloomberg News reported. New listings of foreclosed properties nationwide rose 48% in January from a year earlier, compared with 37% in 2023, according to a report by real estate agency China Index Holdings published Thursday. The 100,400 properties listed for sale last month include residential, commercial and industrial real estate. Transactions in January also rose about 18% on-year.

As the annual meeting of China's parliament approaches next month, its leaders are facing the greatest pressure in almost a decade to take bold policy decisions that safeguard the economy's long-term growth potential, Reuters reported. The start of the year saw Chinese stocks tumbling to five-year lows on growth concerns and deflation deepening to levels unseen since the global financial crisis, prompting comparisons with the 2015 turmoil that forced policymakers into action.

Chinese banks have approved property development loans of $17.20 billion as part of a special mechanism to inject liquidity into the sector, but detailed statements show some loans to distressed developers are only adjustments of existing credit, Reuters reported.

China’s economic malaise has pushed policymakers and state-owned banks to attempt an escalating series of remedies. Their latest attempt: A surprisingly aggressive cut to a key lending rate, the Wall Street Journal reported. The People’s Bank of China said Tuesday that China’s major banks reduced the five-year loan prime rate, a benchmark for home loans, to a new low of 3.95%, from 4.2% previously. It was the largest cut since the rate was introduced five years ago, and a much bigger reduction than economists had expected.

China cut the benchmark reference rate for mortgages at a monthly fixing on Tuesday by more than expected, as authorities ramped up efforts to stimulate credit demand and revive the property market, Reuters reported. Commercial banks' improving net interest margins following recent deposit rate cuts and the reduction to bank reserves earlier this month has paved the way for lenders to reduce borrowing costs to support the economy. The five-year loan prime rate (LPR) was lowered by 25 basis points to 3.90% from 4.20% previously, while the one-year LPR was left unchanged at 3.45%.

China’s massive property market is crumbling. Xi Jinping wants to revive socialist ideas about housing and put the state back in charge, the Wall Street Journal reported. Home prices across China are falling, developers have gone bust and people are doubting whether real estate will ever be a viable investment again. The meltdown is dragging down growth and spooking investors worldwide. Under the new strategy, the Communist Party would take over a larger share of the market, which for years has been dominated by the private sector.