Headlines

All politics is local, runs the old saw. In China, local governments lie at the root of the country’s debt problem—a problem likely only to grow in 2019, The Wall Street Journal reported. Most analysts see the Chinese government’s relatively low debt—equivalent to around 16% of GDP at the end of 2017, according to Moody’s—as a strength. But add in both official local government debt, and debt issued by off-balance sheet financing vehicles backed by local governments—known as LGFVs—and that ratio climbs to 60% of GDP.

Mozambique's former finance minister, Manuel Chang, has been arrested in South Africa at the request of the United States, a police spokesman said on Monday. Chang, who was in charge of Mozambique's finances when it guaranteed $2 billion in secret borrowing by state-owned firms in 2013 and 2014, was arrested on Saturday in Johannesburg, the International New York Times reported on a Reuters story. "He is wanted by the U.S.," police spokesman Vish Naidoo said.

Tokyo District Court said on Monday it has extended the detention of ousted Nissan Motor chairman Carlos Ghosn until January 11th, The Irish Times reported. Mr Ghosn, accused of aggravated breach of trust, is facing allegations of making the car maker shoulder 1.85 billion yen (€14.6 million) in personal investment losses. The latest extension will see Ghosn remain in Tokyo’s main detention centre, where he has been confined since his first arrest on November 19th on allegations of financial misconduct.

Turkey is facing a mounting number of applications for bankruptcy protection as a slump in economic growth takes its toll on business, the Financial Times reported.

Greece’s Public Power Corp (PPC) will continue to supply debt-laden Larco, Europe’s biggest nickel producer, with electricity until next month, extending a previous deadline which expires later on Monday, Reuters reported. Larco, which is 55 percent owned by the Greek state, owes about 280 million euros ($319 million) in unpaid electricity bills to state-controlled power utility PPC, also a minority shareholder in the company.

Indian power companies spent much of the past decade rushing to build coal-fired power plants in anticipation of surging electricity demand as economic growth took off. Now, many of those projects are mired in deep financial distress and private investment in coal power has ground to a near halt, the Financial Times reported. The sector has been hit by a host of problems: many plants have struggled to secure fuel supplies, and to clinch deals to sell their power to cash-strapped state distribution companies.

January 1 marks the 20th anniversary of the euro’s launch as an electronic currency. It is good that Europe’s leaders are passing this milestone in a more guarded, less self-congratulatory spirit than was the case in the build-up to the 10th anniversary, the Financial Times reported in a commentary. In 2008 the European Commission published a report that described the euro as “a potent symbol of our growing political unity” and “a pole of stability for the global economy”. The report was barely off the printing presses before the western world’s financial system was in meltdown.

A growing chorus of observers expect debt defaults in Asia will spread as weakening currencies and tighter liquidity leave riskier borrowers with higher refinancing costs, Bloomberg News reported. Rising failures add to headwinds that governments have to navigate during a politically fraught 2019, with elections in India and Indonesia. Asian dollar bond market defaults tripled to at least nine in 2018 from the previous year, according to Bloomberg-compiled data. n India, a landmark default by shadow lender Infrastructure Leasing & Financial Services Ltd.

The U.K.’s top law-enforcement body is examining allegations that an employee leaked information to a suspect in exchange for money, undermining a probe into a suspected network of European insider traders, the Wall Street Journal reported. The internal corruption unit of the National Crime Agency, the U.K.’s equivalent of the Federal Bureau of Investigation, is assessing whether a government translator who had access to wiretap recordings tipped off the target of an insider-trading investigation.