China

Hundreds of thousands of Chinese investors are confronting a distressing reality: Their investments with Zhongzhi Enterprise Group, a financial giant managing $140 billion in assets, and its trust banking arm, Zhongrong, might be at risk, the New York Times reported. Starting in July, companies affiliated with Zhongzhi missed dozens of payments to investors. They have offered no timetable for when people will be paid, fueling concerns that one of China’s largest so-called shadow banks may be near collapse.

China has limited room for further monetary policy easing, and it should pursue structural reforms such as encouraging entrepreneurs rather than counting on macroeconomic policies to revive growth, a central bank adviser said on Sunday, Reuters reported. Liu Shijin, a member of the People's Bank of China's (PBOC) monetary policy committee, told a financial forum in Shanghai that Beijing's room for monetary policy easing was limited by widening interest rate differentials with the U.S. Fiscally, Chinese governments at various levels are under stress, he told the annual Bund Summit conference.

China's economic slowdown is polarising government advisers over the best way forward, with advocates of structural reforms now emerging from the shadows in a challenge to others calling for more state spending to shore up faltering growth, Reuters reported. The rare debate among advisers, who influence policy-making but do not wield direct power, comes as global markets scramble for clues on how authorities will halt a downturn that has left millions without jobs, forced investors to flee and the yuan to tank.

China will speed up the introduction of more policies to consolidate its economic recovery, state media CCTV reported on Wednesday, citing a cabinet meeting chaired by Premier Li Qiang, after the economy showed tentative signs of stabilising, Reuters reported. With a flurry of support steps kicking in, the $18 trillion economy showed better-than-expected figures including bank lending, industrial production and consumption gauges last month, but the wobbling property sector still weighs on its economic outlook.

Chinese developer Sunac China Holdings has filed for chapter 15 protection from creditors in a U.S. bankruptcy court, court documents showed, Reuters reported. Creditors of Sunac China Holdings approved its $9 billion offshore debt restructuring plan on Monday, marking the first approval of such debt overhaul by a major Chinese property developer.

China’s giant housing industry is lurching into a new crisis that threatens to be the country’s worst yet, the Wall Street Journal reported. Two years ago, the debt-laden developer China Evergrande Group spiraled into insolvency, bursting the country’s real-estate bubble and setting off a chain of developer defaults and business losses. The industry’s troubles have dragged down China’s economy. Now China’s largest privately run property developer, Country Garden, is struggling to survive.

The involvement of two Chinese state-owned financial firms in Zhongrong International Trust Co's operations and management may diffuse risk at the troubled shadow bank but does little to ease concerns about missed payments, analysts and investors said, Reuters reported. The shadow bank, which traditionally had sizable real estate exposure, missed payments on dozens of so-called trust products since late July, roiling markets and raising fears that China's financial system may be at risk from the property sector crisis.

Distressed Chinese developer Country Garden Holdings Co. faces two more tests Monday: an initial deadline to pay dollar bond interest and the end of creditor voting on its request to extend payment on a yuan note, Bloomberg News reported. Holders of that local bond due Oct. 21 have until 10 p.m. Beijing time Monday to vote on the proposal to stretch payment by three years. If they reject it, Country Garden would need to pay the 492 million yuan ($67.6 million) of outstanding principal next month, its largest near-term maturity just as it’s struggled to make smaller payments.

China’s central bank announced a policy change on Thursday that will allow the country’s banks to lend more money, but a nationwide economic slowdown has left many companies and households wary of borrowing, the New York Times reported. The move is the latest in a series of economic stimulus measures by the Chinese government as growth has failed to rebound strongly this year as many expected after nearly three years of stringent pandemic-control regulations.

China’s economy appears to have survived its near miss with a damaging bout of consumer-price deflation—for now, the Wall Street Journal reported. After a grim June and July, China’s main August economic data, released Friday, contained clear hints of improvement. The news from the critical housing sector, which is mired in a protracted slump, was less encouraging: Price falls accelerated in lower-tier cities. But growth in retail sales accelerated to 4.6% from a year earlier, from just 2.5% in July. Unemployment ticked down marginally.