China’s leverage ratio — the ratio of debt to assets or equity — is rising at an alarming pace and approaching a historical high. High leverage ratios have in the past caused concern that financial…
FINANCE
China manufacturing grew more than expected in May, official survey shows
ANZ’s senior China economist Betty Wang said in a note that the bank expects infrastructure investment to take a “big role” in supporting growth in the months ahead. “Infrastructure investment appears to have decoupled from…
Why China’s Debt Downgrade is a Tempest in a Teacup
It’s easy to see how these “scary” headline numbers could be used to frighten investors away, especially when those figures get taken completely out of context from what’s actually happening in China today. First, financial…
Special Report: ‘Ghost collateral’ haunts loans across China’s banking system
SHANGHAI The banker at the other end of the phone line was furious, recalled Shanghai lawyer Wang Chaoyu. A pile of steel pledged as collateral for a loan of almost $3 million from his bank,…
China factory PMI growth holds up in May, steel sector activity speeds up
BEIJING China manufacturing sector grew faster than expected in May as activity in the steel industry rebounded sharply, an official survey showed on Wednesday, allaying concerns of slowing economic momentum as Beijing cracks down on…
China’s real credit risk lurks in shadow finance
But financial markets greeted China’s downgrade last week by Moody’s, the credit rating agency, with their version of a nonchalant shrug. Chinese domestic bond prices remained steady and Hong Kong’s main stock index actually rose…
China’s shadow banking crackdown shakes markets
A crackdown on China’s $9.4tn shadow banking business is hitting bank share prices and rattling bond markets. The country’s new top banking regulator has already taken several shots at stemming the rapid growth of off-balance-sheet…
New trends in China’s banking industry
In 2016, the Chinese central bank launched the Macro Prudential Assessment (MPA) regime and began to assess the overall financial health of banks. [Photo/Xinhua] China’s rapid technological progress has brought about a revolution in the…
The other credit risk to watch in China: Fintech-fuelled debt
China’s government has copped what Scott Morrison is so desperate to avoid: a credit rating downgrade. But in the discussion about Moody’s surprise move last week to cut its rating for our biggest trading partner,…
China mulls new yuan pricing formula to raise stability
China plans to change a formula for forming the yuan-U.S. dollar central parity rate, a move to ensure stable exchange rates at a time when global financial markets remains beset by instability. Under China’s market-based,…
The Lesson From Moody’s Overdue Downgrade Of China’s Debt
Moody’s has finally recognized the dangers of instability in China’s financial system and economy. This past week, the ratings agency downgraded China’s debt one notch from Aa3 to A1. Although that might not seem like…
China’s banking sector is facing new headwinds as asset growth cools
For the past few years, Chinese banks boosted their assets at a rapid clip, mainly by disguising loans as investments. But as the expansion has slowed considerably in recent months, industry insiders are beginning to…
The Next Global Financial Crisis: A Chinese Sovereign Debt Default?
Moody’s recent downgrading of China’s sovereign debt rating triggered waves of reaction in both financial markets and policy circles. But like many other rating adjustments it looks more like a lagging, rather than a leading,…
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