Headlines

A cornerstone of China's financial edifice is beginning to show some cracks, The Wall Street Journal reported. The country's banking sector, a key part of a financial system that has powered China through three decades of breakneck expansion, is feeling the strain of years of rapid credit growth. Bank-fueled lending to state enterprises and local governments has led to overcapacity; serious debt problems for local governments, companies and lenders alike; and numerous white-elephant projects, from nearly empty malls and resorts to bridges to nowhere.

Concerns are growing in India that a worsening economic slowdown in Asia’s third-largest economy may be increasing debt burdens at some of the country’s most important industrial companies to unsustainable levels, the Financial Times reported. New research from Credit Suisse reveals that 10 of the country’s most heavily indebted industrial conglomerates, including billionaire Anil Ambani’s Reliance companies along with the Vedanta and Essar groups, had combined gross debts of $102bn at the end of the last financial year, up 15 per cent from the year before.

Vietnam is the world's biggest producer of the strong-flavoured robusta beans, used for instant coffee, and has experienced a decade of solid growth which has seen coffee exports reach $3 billion a year, Reuters reported. But its coffee industry is now in crisis, plagued by tax evasion, mismanagement, insolvency, high interest rates and a credit squeeze. Many coffee operators are trapped with crippling debt and banks are reluctant to lend them more money.

Dissent within the Bank of England's interest-rate setting panel fueled investor doubts Wednesday over whether the central bank can stick to its new governor's pledge not to raise interest rates until joblessness in the U.K. falls sharply, The Wall Street Journal reported. New BOE Gov. Mark Carney, in his debut news conference last week, outlined a major shift in the central bank's policy framework, vowing to keep interest rates at record lows at least until the U.K. jobless rate falls to 7%. BOE officials predict such a drop could take until 2016.

Portugal emerged from 2½ years of recession last quarter largely because of a sharp rise in exports, but economists said further austerity measures required under the country's international bailout program may make the recovery short-lived, The Wall Street Journal reported. Gross domestic product rose 1.1% in the second quarter compared with the first quarter but remained 2% below its level a year ago, according to a flash estimate Wednesday by the country's statistics agency. The economy hadn't registered growth since the final three months of 2010.

Britain is flirting with another runaway rise in house prices, according to a Reuters poll of economists, with a firm majority putting the chances at 50-50 or higher over the next five years. Despite those concerns, there was a clear consensus that the recent improvement in data heralds a sustainable economic recovery for the UK, which has struggled over the last three years to escape recession.

The North’s Department of Enterprise is not often known for its perfect timing – so perhaps it is just a “lucky” coincidence that it is looking for a new director of its insolvency service at the same time as latest figures show a rapid rise in personal and corporate insolvencies in Northern Ireland, the Irish Times reported. According to UK official insolvency statistics for the second quarter of 2013, 894 people were declared insolvent in Northern Ireland.

One of Australia’s leading bedroom product companies, Sleepmaster, has gone into receivership as the tough retail sector claims another victim, The Motley Fool reported. Sleepmaster is the owner of iconic brands including Jason, a pillow and quilt brand, blanket brand Onkaparinga and Trailmaster camping equipment. It describes itself as Australia and Asia’s leading manufacturer of bedroom product including quilts, pillows, mattress protectors, underblankets and underquilts.

Canada will shut down the rail operator whose tanker train blew up in a Quebec town last month, killing 47 people, because the firm does not have enough insurance to pay clean-up costs and other damages, a government regulator said on Tuesday, Reuters reported. The Canadian Transportation Agency said it would suspend the operating license of Montreal, Maine and Atlantic Railway (MMA) and its Canadian subsidiary from Aug.

German postproduction outfit CinePostproduction has filed for bankruptcy protection, the latest in a long line of VFX houses to go bust as the entire industry struggles to find a workable business model, The Hollywood Reporter reported. The Munich-based company, a subsidiary of the CineMedia group, is one of Germany's largest postproduction firms, with offices in Munich, Berlin, Hamburg, Cologne and Halle.