China plans to merge three of its biggest state-owned bad debt asset managers under the wing of its sovereign wealth fund, the China Investment Corp (CIC). This announcement, reported by Xinhua news agency on Sunday, comes alongside other recent financial reforms, signalling Beijing's quest to stabilise its capital markets.

The three asset managers – China Cinda, Orient, and Great Wall – specialise in handling non-performing loans and distressed assets. Bringing them under the umbrella of the CIC, one of the world's largest sovereign wealth funds aims to centralise bad debt management and potentially unlock new avenues for restructuring and recovery.

This consolidation forms part of a broader package of financial reforms unveiled in recent weeks. Just a day earlier, China's securities regulator temporarily suspended lending for restricted shares, another measure intended to inject stability into the stock market. These initiatives follow a period of market turbulence triggered by growing financial risks, particularly within the real estate sector.

China's property market has faced significant headwinds since 2020, when authorities tightened regulations on developers' debt-fueled growth. While promoting long-term financial health, this crackdown led to a slump in the sector, impacting consumer spending and overall economic growth. Evergrande's recent liquidation struggles are a testament to this downfall.

The real estate troubles in China are not isolated but intricately linked with local government finances. Historically, local governments have heavily relied on revenue from land sales to developers. However, the recent clampdown has disrupted this traditional revenue stream, creating financial challenges for local authorities.

Last week, the central bank's cut in mandatory cash reserves aimed to ease liquidity constraints for banks. At the same time, a new policy mandate specifically targets alleviating the cash crunch developers face. The consolidation of bad debt management under the CIC adds another piece to this reform puzzle.

By centralising expertise and resources, the merger potentially allows for more efficient restructuring of distressed assets, mitigating risks within the financial system and ultimately contributing to a more stable and resilient property market. The full details of the merger and its long-term implications remain to be seen.

China plans to merge three of its biggest state-owned bad debt asset managers under the wing of its sovereign wealth fund, the China Investment Corp (CIC). This announcement, reported by Xinhua news agency on Sunday, comes alongside other recent financial reforms, signalling Beijing's quest to stabilise its capital markets.

China plans to merge three of its biggest state-owned bad debt asset managers under the wing of its sovereign wealth fund, the China Investment Corp (CIC). This announcement, reported by Xinhua news agency on Sunday, comes alongside other recent financial reforms, signalling Beijing's quest to stabilise its capital markets. The three asset managers – China Cinda, Orient, and Great Wall – specialise in handling non-performing loans and distressed assets. Bringing them under the umbrella of the CIC, one of the world's largest sovereign wealth funds aims to centralise bad debt management and potentially unlock new avenues for restructuring and recovery. This consolidation forms part of a broader package of financial reforms unveiled in recent weeks. Just a day earlier, China's securities regulator temporarily suspended lending for restricted shares, another measure intended to inject stability into the stock market. These initiatives follow a period of market turbulence triggered by growing financial risks, particularly within the real estate sector. China's property market has faced significant headwinds since 2020, when authorities tightened regulations on developers' debt-fueled growth. While promoting long-term financial health, this crackdown led to a slump in the sector, impacting consumer spending and overall economic growth. Evergrande's recent liquidation struggles are a testament to this downfall. The real estate troubles in China are not isolated but intricately linked with local government finances. Historically, local governments have heavily relied on revenue from land sales to developers. However, the recent clampdown has disrupted this traditional revenue stream, creating financial challenges for local authorities. Last week, the central bank's cut in mandatory cash reserves aimed to ease liquidity constraints for banks. At the same time, a new policy mandate specifically targets alleviating the cash crunch developers face. The consolidation of bad debt management under the CIC adds another piece to this reform puzzle. By centralising expertise and resources, the merger potentially allows for more efficient restructuring of distressed assets, mitigating risks within the financial system and ultimately contributing to a more stable and resilient property market. The full details of the merger and its long-term implications remain to be seen.

China consolidates bad debt management amid market reforms

An American Research agency has uncovered a monumental shift in China's lending strategy from 2000 to 2021. Chinese financial institutions have reportedly paid a staggering $1.34 trillion into developing nations more eye-catching has been its radical shift from traditional infrastructure Investments to what's been called rescue lending.

China lends $1.34 trillion between 2000-2021, overseas lending undergoes remarkable shift | WION

Concerns are growing over China's debt-trap diplomacy. Analysts say Beijing intentionally excessively lends money to low-income indebted states that cannot later repay Chinese debt. The borrowing state is thus forced to relinquish some of its strategic assets to decrease its debt burden towards china, a debt-for-equity swap. Countries are becoming ensnared in a debt trap that leaves them vulnerable to China’s influence.

China's debt-trap diplomacy forces nations to cede strategic assets | Africa infrastructure projects

China's financial storm is now brewing after once being the epicenter of the Covid-19 pandemic. Wuhan now faces a new challenge and that is collecting overdue debts from hundreds of local companies.

China's debt dilemma: Cash crunch in Wuhan puts China's financial woes in spotlight | WION

The bustling city of Wuhan in China will face a financial storm that is brewing. Once the epicenter of the COVID-19 pandemic Wuhan now faces a new challenge and that is about collecting debt from hundreds of local companies. The city's Finance Bureau has made an unprecedented public demand urging 259 entities to repay their debt which totals well over a hundred million Yuan which is about 14 million dollars.

China's debt dilemma, cash crunch in Wuhan | English News

Pakistan, Sri Lanka, Kenya, Zambia, Mongolia and Laos, what do these countries have in common ? These countries are either on the brink of bankruptcy or have already gone bankrupt. A dozen poor countries are on the verge of collapse under the weight of billions of dollars in foreign loans that they had taken from China.

China's loan policy pushing poor countries to brink of collapse | World Business Watch

To help debt-ridden countries in the G20 bloc who have been unable to recover from the post-pandemic economic shocks and the Russia-Ukraine war, India is drafting a proposal whereby it will call upon the credit lending nations like China to take a large haircut on loans.&nbsp;According to Reuters news agency, which has quoted two Indian officials, a meeting will be held in Bengaluru city of India's southern state Karnataka next week where finance ministers and central bank chiefs from the Group of 20 will assemble to hold discussions on the draft.

The gathering will be the first major event of India's one-year presidency of the G20.

It is believed that China and other G20 countries are aware that India is working on the proposal, the officials were quoted as saying. One of the Indian officials said that India is expecting United States to back its proposal.

China's Ministry of Foreign Affairs did not react on the matter when it was reached out for a comment. Its spokesperson Wang Wenbin during a news conference on Tuesday talked about the difficulties faced by countries in servicing their debts.

"China takes the debt issue of developing countries seriously and supports relevant financial institutions to put forward solutions. It is our consistent stance that multilateral financial institutions and commercial creditors, which hold the bulk of the debt of developing countries, should participate in the debt relief efforts," he said.

The proposal comes in the wake of Pakistan and Sri Lanka, two of India’s neighbours, facing one of their worst economic crises. They have been seeking international help to tide over foreign currency shortage to pay for vital imports.

Recently, India and Paris Club of creditors supported Sri Lanka's debt restructuring plan as the bankrupt nation sought a $2.9 billion loan.

China’s Export-Import Bank of China has also offered a two-year moratorium on its debt to Sri Lanka and said that it would support the country's efforts to secure an IMF programme.

(With inputs from agencies)

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To help debt-ridden countries in the G20 bloc who have been unable to recover from the post-pandemic economic shocks and the Russia-Ukraine war, India is drafting a proposal whereby it will call upon the credit lending nations like China to take a large haircut on loans.

To help debt-ridden countries in the G20 bloc who have been unable to recover from the post-pandemic economic shocks and the Russia-Ukraine war, India is drafting a proposal whereby it will call upon the credit lending nations like China to take a large haircut on loans. According to Reuters news agency, which has quoted two Indian officials, a meeting will be held in Bengaluru city of India's southern state Karnataka next week where finance ministers and central bank chiefs from the Group of 20 will assemble to hold discussions on the draft. The gathering will be the first major event of India's one-year presidency of the G20. It is believed that China and other G20 countries are aware that India is working on the proposal, the officials were quoted as saying. One of the Indian officials said that India is expecting United States to back its proposal. China's Ministry of Foreign Affairs did not react on the matter when it was reached out for a comment. Its spokesperson Wang Wenbin during a news conference on Tuesday talked about the difficulties faced by countries in servicing their debts. "China takes the debt issue of developing countries seriously and supports relevant financial institutions to put forward solutions. It is our consistent stance that multilateral financial institutions and commercial creditors, which hold the bulk of the debt of developing countries, should participate in the debt relief efforts," he said. The proposal comes in the wake of Pakistan and Sri Lanka, two of India’s neighbours, facing one of their worst economic crises. They have been seeking international help to tide over foreign currency shortage to pay for vital imports. Recently, India and Paris Club of creditors supported Sri Lanka's debt restructuring plan as the bankrupt nation sought a $2.9 billion loan. China’s Export-Import Bank of China has also offered a two-year moratorium on its debt to Sri Lanka and said that it would support the country's efforts to secure an IMF programme. (With inputs from agencies) WATCH WION LIVE HERE

India working on proposal for China, other lending nations to take haircut on given loans: Report

China’s beleaguered provinces reportedly spent $45.80 billion on anti-Covid measures in 2022. The figure is expected to rise as China still reels under the economic stress induced by the pandemic. While comprehensive national data on governmental spending is not available in China, at least 20 of the country’s 31 provinces have revealed details about their COVID-19 expenses. Of all, China’s southernmost province of Guangdong spent the highest amount of money on checking the spread of the pandemic. It spent a whopping amount of $9.20 billion alone on testing and vaccination. This amount was equal to 0.6 per cent of the province’s Gross Domestic Product last year.

WATCH:&nbsp;WION Dispatch: India takes precautionary measures after Covid cases rise in China

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<h2>Anti-Covid spending in top Chinese cities</h2>

The Chinese capital city of Beijing topped the chart in Covid expenses with $3.85 billion in 2022. This was equal to 111 per cent of the city’s total annual healthcare budget. Shanghai, China’s financial hub, also spent $2.45 billion on anti-COVID-19 measures. Shanghai's economy suffered greatly during the two months of complete lockdown, and it shrank by 0.2% in 2022.

<h2>Latest Covid updates from China</h2>

The cost of COVID-19 is still high for the average Chinese people. China's National Health Commission stopped publishing data on daily cases in December due to worries that there would be a sharp increase in infections following the withdrawal of the Zero-Covid policy. China has officially documented roughly 80,000 Covid-19 deaths since December, which would be a significantly lower death rate than Hong Kong suffered in the first two months of its Omicron wave.

Also Read |&nbsp;<a href="https://www.wionews.com/world/about-900-million-in-china-infected-with-covid-chinese-university-study-552374">About 900 million in China infected with Covid</a>

<h2>Chinese provinces under great economic stress</h2>

China’s 31 provinces are already buried under a huge stockpile of outstanding bonds. They are close to breaching the Ministry of Finance’s threshold of 120 per cent of their income. Local authorities are expected to hit a tall maturity wall in upcoming years. As per a report by Bloomberg, bonds worth $2.1 trillion are due over the next 5 years, which is roughly equal to 40 per cent of their total outstanding debt.

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China’s beleaguered provinces reportedly spent $45.80 billion on anti-Covid measures in 2022. The figure is expected to rise as China still reels under the economic stress induced by the pandemic.

China’s beleaguered provinces reportedly spent $45.80 billion on anti-Covid measures in 2022. The figure is expected to rise as China still reels under the economic stress induced by the pandemic. While comprehensive national data on governmental spending is not available in China, at least 20 of the country’s 31 provinces have revealed details about their COVID-19 expenses. Of all, China’s southernmost province of Guangdong spent the highest amount of money on checking the spread of the pandemic. It spent a whopping amount of $9.20 billion alone on testing and vaccination. This amount was equal to 0.6 per cent of the province’s Gross Domestic Product last year. WATCH: WION Dispatch: India takes precautionary measures after Covid cases rise in China × Anti-Covid spending in top Chinese cities The Chinese capital city of Beijing topped the chart in Covid expenses with $3.85 billion in 2022. This was equal to 111 per cent of the city’s total annual healthcare budget. Shanghai, China’s financial hub, also spent $2.45 billion on anti-COVID-19 measures. Shanghai's economy suffered greatly during the two months of complete lockdown, and it shrank by 0.2% in 2022. Latest Covid updates from China The cost of COVID-19 is still high for the average Chinese people. China's National Health Commission stopped publishing data on daily cases in December due to worries that there would be a sharp increase in infections following the withdrawal of the Zero-Covid policy. China has officially documented roughly 80,000 Covid-19 deaths since December, which would be a significantly lower death rate than Hong Kong suffered in the first two months of its Omicron wave. Also Read | About 900 million in China infected with Covid Chinese provinces under great economic stress China’s 31 provinces are already buried under a huge stockpile of outstanding bonds. They are close to breaching the Ministry of Finance’s threshold of 120 per cent of their income. Local authorities are expected to hit a tall maturity wall in upcoming years. As per a report by Bloomberg, bonds worth $2.1 trillion are due over the next 5 years, which is roughly equal to 40 per cent of their total outstanding debt. WATCH WION LIVE HERE ×

COVID-19 expenses pile misery on the Chinese economy as provinces reveal staggering data

China and Pakistan have signed a precursor deal to develop the Karachi coastline. Beijing is expected to invest $3.5 billion in what is being called another debt trap. What does this deal mean for the Gwadar port? Palki Sharma tells you.

Gravitas: China's new debt trap: Karachi port

The International Monetary Fund on Friday lowered its 2021 growth forecast for China to 7.9 percent, following a year of "significant human and economic costs" inflicted by the Covid-19 crisis.

The figure is slightly below the 8.2 percent the IMF earlier predicted, although China has been pegged as the only major economy likely to expand in the face of the coronavirus.

After a record contraction in the first three months last year due to unprecedented lockdowns and factory closures, the world's number-two economy has since bounced back.

But the 1.9 percent full-year growth for 2020 that the IMF maintains, if confirmed, will be its worst showing since 1976, just before the start of its economic reform era.

"The Chinese economy continues its fast recovery from the pandemic, helped by a strong containment effort and swift policy actions to mitigate the impact of the crisis," said the IMF.

"However, growth is still unbalanced as the recovery has relied heavily on public support while private consumption is lagging," it added.

With increased spending to support its economic recovery, China's general government deficit is projected to rise to 18.2 percent of GDP in 2020, up from 12.6 percent the year before.

China's economy is adjusting to the "pandemic normal", with help from technology and digitalisation of services, but the IMF cautioned that activity is expected to remain below capacity over the medium term.

The warning comes as certain sectors ranging from hospitality to restaurants remain affected by restrictions.

"Until end-2021, some restrictions and voluntary social distancing will continue to dampen person-to-person services activity," said the IMF's report.

The International Monetary Fund on Friday lowered its 2021 growth forecast for China to 7.9 percent, following a year of "significant human and economic costs" inflicted by the Covid-19 crisis.

The International Monetary Fund on Friday lowered its 2021 growth forecast for China to 7.9 percent, following a year of "significant human and economic costs" inflicted by the Covid-19 crisis. The figure is slightly below the 8.2 percent the IMF earlier predicted, although China has been pegged as the only major economy likely to expand in the face of the coronavirus. After a record contraction in the first three months last year due to unprecedented lockdowns and factory closures, the world's number-two economy has since bounced back. But the 1.9 percent full-year growth for 2020 that the IMF maintains, if confirmed, will be its worst showing since 1976, just before the start of its economic reform era. "The Chinese economy continues its fast recovery from the pandemic, helped by a strong containment effort and swift policy actions to mitigate the impact of the crisis," said the IMF. "However, growth is still unbalanced as the recovery has relied heavily on public support while private consumption is lagging," it added. With increased spending to support its economic recovery, China's general government deficit is projected to rise to 18.2 percent of GDP in 2020, up from 12.6 percent the year before. China's economy is adjusting to the "pandemic normal", with help from technology and digitalisation of services, but the IMF cautioned that activity is expected to remain below capacity over the medium term. The warning comes as certain sectors ranging from hospitality to restaurants remain affected by restrictions. "Until end-2021, some restrictions and voluntary social distancing will continue to dampen person-to-person services activity," said the IMF's report.

IMF lowers China growth forecast to 7.9% for 2021

The coronavirus outbreak has brought China’s extraordinary,&nbsp;nearly half-century-long run of growth&nbsp;to an end&nbsp;a stark reminder of the enormous task ahead for world leaders trying to restart the global economy.

Since mid-August, the United States has repeatedly riled&nbsp;China&nbsp;by sending warships to the&nbsp;South&nbsp;China&nbsp;Sea&nbsp;and has blacklisted 24 Chinese entities over their involvement in building and militarising artificial islands there.

China's faulty policies have exposed the countries to vulnerabilities such as financial stress due to massive unpaid debts.

Chinese&nbsp;officials said that the world's second-largest&nbsp;economy&nbsp;shrank 6.8 percent in the first three months of the year compared with a year ago, ending a streak of untrammeled growth that survived the Tiananmen Square crackdown, the SARS epidemic, and even the global financial&nbsp;crisis.

The five largest Chinese banks posted at least 10 percent profit declines for the first half of the year. These poor results, the result of increased provisions for bad loans, were the biggest profit drops in at least a decade.

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The profit drops are a warning of long-term troubles, especially because, in all probability, the banks are understating the severity of bad loan problems. Moreover, the outlook for China’s banks is gloomy because the outlook for China’s economy is gloomy.

These five Chinese institutions—the Big Four of Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China, and Bank of China plus the Bank of Communications—are struggling.

The essential problem is that the Chinese economy—like the economies of almost all other countries—was flattened by efforts to control the coronavirus. Gross domestic product contracted 6.8% year-on-year in the first calendar quarter of this year, according to the official National Bureau of Statistics. In reality, it was down about twice that.

At least 43.8 billion yuan could not come in because 7 companies filed bankruptcy restructuring applications.&nbsp;This includes&nbsp;the Peking university founder group.

Technology is the worst-hit industry which has accounted for more than a third of the average default.

China's property market is the biggest "grey rhino" - a very obvious yet ignored threat - in terms of financial risks, given it is so deeply intertwined with the financial industry, the head of the country's&nbsp;banking regulator said.

Guo Shuqing, who is chairman of the&nbsp;China&nbsp;Banking and Insurance Regulatory Commission (CBIRC) and party chief of the country's central&nbsp;bank, made the comments in a collection of articles by policymakers on&nbsp;China's 14th Five-Year Plan, the official Shanghai Securities News reported on Monday.

Loans related to the property market currently account for 39% of total&nbsp;bank&nbsp;loans in&nbsp;China&nbsp;- to say nothing of a large amount of bonds, equities and trust investments with exposure to it, Guo said.

"It's safe to say that the property market is currently the greatest grey rhino in terms of financial risks," he was quoted as saying.

Guo also noted that modern technologies have brought and will continue to bring big changes to the financial industry, with digital currency, cybersecurity and information security emerging as key challenges for regulators.

In response, Guo said the CBIRC would use innovative ways to regulate large technology firms to prevent risks and monopolies, while promoting their development, according to the report.

The coronavirus outbreak has brought China’s extraordinary, nearly half-century-long run of growth to an end a stark reminder of the enormous task ahead for world leaders trying to restart the global economy.

The coronavirus outbreak has brought China’s extraordinary, nearly half-century-long run of growth to an end a stark reminder of the enormous task ahead for world leaders trying to restart the global economy. Since mid-August, the United States has repeatedly riled China by sending warships to the South China Sea and has blacklisted 24 Chinese entities over their involvement in building and militarising artificial islands there. China's faulty policies have exposed the countries to vulnerabilities such as financial stress due to massive unpaid debts. Chinese officials said that the world's second-largest economy shrank 6.8 percent in the first three months of the year compared with a year ago, ending a streak of untrammeled growth that survived the Tiananmen Square crackdown, the SARS epidemic, and even the global financial crisis. The five largest Chinese banks posted at least 10 percent profit declines for the first half of the year. These poor results, the result of increased provisions for bad loans, were the biggest profit drops in at least a decade. × The profit drops are a warning of long-term troubles, especially because, in all probability, the banks are understating the severity of bad loan problems. Moreover, the outlook for China’s banks is gloomy because the outlook for China’s economy is gloomy. These five Chinese institutions—the Big Four of Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China, and Bank of China plus the Bank of Communications—are struggling. The essential problem is that the Chinese economy—like the economies of almost all other countries—was flattened by efforts to control the coronavirus. Gross domestic product contracted 6.8% year-on-year in the first calendar quarter of this year, according to the official National Bureau of Statistics. In reality, it was down about twice that. At least 43.8 billion yuan could not come in because 7 companies filed bankruptcy restructuring applications. This includes the Peking university founder group. Technology is the worst-hit industry which has accounted for more than a third of the average default. China's property market is the biggest "grey rhino" - a very obvious yet ignored threat - in terms of financial risks, given it is so deeply intertwined with the financial industry, the head of the country's banking regulator said. Guo Shuqing, who is chairman of the China Banking and Insurance Regulatory Commission (CBIRC) and party chief of the country's central bank, made the comments in a collection of articles by policymakers on China's 14th Five-Year Plan, the official Shanghai Securities News reported on Monday. Loans related to the property market currently account for 39% of total bank loans in China - to say nothing of a large amount of bonds, equities and trust investments with exposure to it, Guo said. "It's safe to say that the property market is currently the greatest grey rhino in terms of financial risks," he was quoted as saying. Guo also noted that modern technologies have brought and will continue to bring big changes to the financial industry, with digital currency, cybersecurity and information security emerging as key challenges for regulators. In response, Guo said the CBIRC would use innovative ways to regulate large technology firms to prevent risks and monopolies, while promoting their development, according to the report.

Why China cannot afford to fund its campaign of provocation

According to a report, China has tweaked its foreign exchange rules to allow them to invest directly into Chinese bonds. Is the Chinese state short on cash? Palki Sharma Upadhyay tells you more about China's troubles with debt.

Gravitas: China opens its bond market for foreign investors

Chinese cash is turning into kryptonite as all around the world chinese investors are either facing bans or going bust, and the losses are piling up.&nbsp;

Chinese companies were on a buying spree right before the novel coronavirus broke out. However, after the outbreak, they tried to capture assets with hostile takeovers across the globe.

All those investments are now running into losses&nbsp;and new deals are increasingly looking unlikely as&nbsp;China’s biggest groups are struggling in a post-pandemic world.&nbsp;
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In 2015, Chinese conglomerate Fosun International had made a major investment.&nbsp;It had put money in Cirque du Soleil Entertainment — a company that produces the world-famous circus by the same name. However, now Cirque du Soleil is struggling.&nbsp;Fosun International’s investment has been wiped out and the company is under a mountain of debt. The creditors are taking control of it.&nbsp;

<a href="https://www.wionews.com/world/australia-blocks-chinese-firms-bid-to-buy-major-dairy-firm-322972">Also read:&nbsp;Australia blocks Chinese firm's bid to buy major dairy firm</a>

In 2014, Chinese firm Hony Capital had bought Pizza Express — a&nbsp;British business with pizza outlets around the world.&nbsp;The deal was worth $1.54 billion. However, six years later, a group of British creditors want the company back as the Chinese company can not keep up with the payments.&nbsp;Reports say the Chinese company will return Pizza Express to the British.

While China is trapping countries with debt, these two&nbsp;Chinese companies&nbsp;have lost control of their crown jewel acquisitions due to debt. This is not a sporadic case of cruel irony, but is the tip of China's debt iceberg.

China has a hugh debt problem

According to a report, the Chinese economy is bracing for many defaults.&nbsp;China’s bond market is worth over four trillion dollars.&nbsp;Chinese economic recovery has been fragile so far.&nbsp;So, it is not in a position to save many distressed borrowers, and there will be defaults.

Debt papers worth well over $500 billion are set to mature by the end of this year. According to a report, the government has neither the firepower nor the will to backstop it all.&nbsp;China's total domestic debt hit 317 per cent of the GDP.

For the longest time, China has fueled its growth using debt. A lot of the borrowings are off the books, and the hidden government debt could be around $4.2 trillion. The Chinese state is running out of cash.

These two Chinese companies are not the only ones suffering. More chinese companies are being blocked from takeovers abroad.&nbsp;The latest setback comes from Australia where Lion Dairy and Drinks wanted to sell to a Chinese firm&nbsp;Mengniu Dairy, but the deal fell off as&nbsp;the Treasurer of Australia, Josh Frydenberg, objected to the agreement.&nbsp;He said that the deal will be “contrary to national interest”.&nbsp;

Chinese cash is turning into kryptonite as all around the world chinese investors are either facing bans or going bust, and the losses are piling up. Chinese companies were on a buying spree right before the novel coronavirus broke out.

Chinese cash is turning into kryptonite as all around the world chinese investors are either facing bans or going bust, and the losses are piling up. Chinese companies were on a buying spree right before the novel coronavirus broke out. However, after the outbreak, they tried to capture assets with hostile takeovers across the globe. All those investments are now running into losses and new deals are increasingly looking unlikely as China’s biggest groups are struggling in a post-pandemic world. In 2015, Chinese conglomerate Fosun International had made a major investment. It had put money in Cirque du Soleil Entertainment — a company that produces the world-famous circus by the same name. However, now Cirque du Soleil is struggling. Fosun International’s investment has been wiped out and the company is under a mountain of debt. The creditors are taking control of it. Also read: Australia blocks Chinese firm's bid to buy major dairy firm In 2014, Chinese firm Hony Capital had bought Pizza Express — a British business with pizza outlets around the world. The deal was worth $1.54 billion. However, six years later, a group of British creditors want the company back as the Chinese company can not keep up with the payments. Reports say the Chinese company will return Pizza Express to the British. While China is trapping countries with debt, these two Chinese companies have lost control of their crown jewel acquisitions due to debt. This is not a sporadic case of cruel irony, but is the tip of China's debt iceberg. China has a hugh debt problem According to a report, the Chinese economy is bracing for many defaults. China’s bond market is worth over four trillion dollars. Chinese economic recovery has been fragile so far. So, it is not in a position to save many distressed borrowers, and there will be defaults. Debt papers worth well over $500 billion are set to mature by the end of this year. According to a report, the government has neither the firepower nor the will to backstop it all. China's total domestic debt hit 317 per cent of the GDP. For the longest time, China has fueled its growth using debt. A lot of the borrowings are off the books, and the hidden government debt could be around $4.2 trillion. The Chinese state is running out of cash. These two Chinese companies are not the only ones suffering. More chinese companies are being blocked from takeovers abroad. The latest setback comes from Australia where Lion Dairy and Drinks wanted to sell to a Chinese firm Mengniu Dairy, but the deal fell off as the Treasurer of Australia, Josh Frydenberg, objected to the agreement. He said that the deal will be “contrary to national interest”.

Economic distancing: Chinese companies face debts in post-pandemic world

The province of Hebei in China has launched a pilot project - that has led to strict curbs on large withdrawals. Why does China need these new rules? WION's Palki Sharma tells you how bad debts could sink banks in China.

Gravitas: Are Chinese banks crumbling under debt?

The previous Maldivian government had followed a pro-China policy

A flurry of data in coming weeks is expected to show China posted solid economic growth in February, even as the government trimmed its growth target for the year to focus on containing the risks from a rapid build-up in debt.

Export and import growth is expected to hit multi-year highs, according to Reuters polls, adding to views that the global economy are shifting into higher gear and giving China&#39;s policymakers more confidence to press ahead on oft-delayed structural reforms.

China&#39;s first-quarter economic growth could accelerate to 7 per cent year-on-year, from 6.8 per cent in the last quarter, economists at OCBC wrote in a note on Monday, while adding the pace may ease beginning in spring.

Reflecting continued strength in its manufacturing sector, and particularly heavy industry, China&#39;s producer price index (PPI) likely rose 7.7 per cent from a year earlier, the sharpest gain in nearly 9 years.

China&#39;s iron ore and steel prices have been rallying for a year, fueled by a construction boom, though worries are growing over rising inventories. The country&#39;s insatiable demand for resources has helped spur an inflationary pulse in commodities worldwide.

While factory surveys show manufacturers have been able to pass on some of the higher production costs by raising prices of their goods, there has been scant evidence of it flowing through to consumer inflation yet.

Consumer prices likely rose 1.7 percent in February, easing from a 2.5 percent increase in January as food prices normalized following Lunar New Year celebrations. Beijing is targeting consumer inflation at 3 percent this year, unchanged from 2016.

China&#39;s foreign exchange reserves likely fell for an eighth straight month, though the decline was seen to be marginal as a weaker US dollar and tighter restrictions on taking money out of the country dampened pressure from capital outflows.

FX reserves likely dipped to $2.973 trillion, from $2.998 trillion in January, when reserves fell below the closely watched $3 trillion level for the first time in nearly 6 years.

While that level is not seen as a firm &quot;line in the sand&quot; for Beijing, doubts are growing over how much longer authorities can afford to defend both the currency and its reserves if the U.S. dollar resumes its upward trend.

China announces foreign exchange reserves on Tuesday, followed by trade and inflation data on Wednesday and Thursday, respectively, while loan and money data is expected anytime from March 10-15.

China will release activity data on March 14 for industrial output, retail sales and fixed asset investment. The data will combine January and February in a bid to smooth out seasonal factors caused by the timing of the long Lunar New Year holidays, which began in late January this year but fell in February last year.

Industrial output is expected to have risen 6.2 per cent for Jan-Feb, picking up from 6 per cent in December, while fixed asset investment is likely to grow 8.2 per cent, edging up from 8.1 per cent in December.

Retail sales growth is expected to have cooled to 10.5 per cent for Jan-Feb, from 10.9 percent in December.

Car sales have been hit particularly hard as a tax cut was rolled back. General Motors (GM.N) reported on Monday that sales in the first two months fell 14.8 per cent on-year.

Booming Exports, Imports

Trade data is expected to show a further improvement in demand at home and abroad.

Driven largely by purchases of coal, iron ore and crude oil, imports likely rose 20 per cent on-year, the highest since January 2013, and accelerating from 16.7 per cent growth in January, though the February readings may have been distorted by the long holiday, which impacts production and port handling.

Shipments from the world&#39;s largest exporter are seen rising 12.3 per cent in February, the highest since September 2014. Exports rose 7.9 per cent in January.

China&#39;s trade surplus is forecast to have dropped to $25.75 billion in February, versus January&#39;s $51.35 billion. The surplus, long an irritant with some of its major trading partners, has come under fresh scrutiny amid fears of rising US trade protectionism under new President Donald Trump.

Lending seen slowing

While China&#39;s trade data often steals the headlines, loan and money supply figures may come under the closest scrutiny by investors after Premier Li Keqiang said on Sunday that the economic growth target would be cut to 6.5 per cent this year to give policymakers more room to focus on reforms and erect a &quot;firewall&quot; against financial risks.

Authorities had made similar pledges to tackle debt risks last year, even as banks extended a record amount of credit.

Still, new bank lending likely eased sharply to 920 billion yuan ($133.40 billion) in February from January&#39;s 2.03 trillion, which was the second-highest monthly tally on record.

Chinese banks usually &quot;front load&quot; loans early in the year after the government renews their credit quotas, competing fiercely to maintain market share and to lock in higher-quality borrowers as soon as possible.

Growth in outstanding loans likely inched up to 12.7 per cent on-year in February, while M2 money supply likely rose 11.4 per cent, from 11.3 per cent in January.

Beijing has the target for broad money supply growth this year to around 12 per cent from about 13 per cent for 2016.

With the economy on more stable footing, China&#39;s central bank has moved cautiously to a tightening policy bias in recent months to contain capital outflows and rein in debt risks.

It raised short-term interest rates modestly in January and February and is expected to do so again in coming months, but is seen keeping its benchmark policy lending rate steady through at least mid-2018, according to a separate Reuters poll.

(Reuters)

Export and import growth is expected to hit multi-year highs, giving China's policymakers confidence to effect structural reforms

A flurry of data in coming weeks is expected to show China posted solid economic growth in February, even as the government trimmed its growth target for the year to focus on containing the risks from a rapid build-up in debt. Export and import growth is expected to hit multi-year highs, according to Reuters polls, adding to views that the global economy are shifting into higher gear and giving China's policymakers more confidence to press ahead on oft-delayed structural reforms. China's first-quarter economic growth could accelerate to 7 per cent year-on-year, from 6.8 per cent in the last quarter, economists at OCBC wrote in a note on Monday, while adding the pace may ease beginning in spring. Reflecting continued strength in its manufacturing sector, and particularly heavy industry, China's producer price index (PPI) likely rose 7.7 per cent from a year earlier, the sharpest gain in nearly 9 years. China's iron ore and steel prices have been rallying for a year, fueled by a construction boom, though worries are growing over rising inventories. The country's insatiable demand for resources has helped spur an inflationary pulse in commodities worldwide. While factory surveys show manufacturers have been able to pass on some of the higher production costs by raising prices of their goods, there has been scant evidence of it flowing through to consumer inflation yet. Consumer prices likely rose 1.7 percent in February, easing from a 2.5 percent increase in January as food prices normalized following Lunar New Year celebrations. Beijing is targeting consumer inflation at 3 percent this year, unchanged from 2016. China's foreign exchange reserves likely fell for an eighth straight month, though the decline was seen to be marginal as a weaker US dollar and tighter restrictions on taking money out of the country dampened pressure from capital outflows. FX reserves likely dipped to $2.973 trillion, from $2.998 trillion in January, when reserves fell below the closely watched $3 trillion level for the first time in nearly 6 years. While that level is not seen as a firm "line in the sand" for Beijing, doubts are growing over how much longer authorities can afford to defend both the currency and its reserves if the U.S. dollar resumes its upward trend. China announces foreign exchange reserves on Tuesday, followed by trade and inflation data on Wednesday and Thursday, respectively, while loan and money data is expected anytime from March 10-15. China will release activity data on March 14 for industrial output, retail sales and fixed asset investment. The data will combine January and February in a bid to smooth out seasonal factors caused by the timing of the long Lunar New Year holidays, which began in late January this year but fell in February last year. Industrial output is expected to have risen 6.2 per cent for Jan-Feb, picking up from 6 per cent in December, while fixed asset investment is likely to grow 8.2 per cent, edging up from 8.1 per cent in December. Retail sales growth is expected to have cooled to 10.5 per cent for Jan-Feb, from 10.9 percent in December. Car sales have been hit particularly hard as a tax cut was rolled back. General Motors (GM.N) reported on Monday that sales in the first two months fell 14.8 per cent on-year. Booming Exports, Imports Trade data is expected to show a further improvement in demand at home and abroad. Driven largely by purchases of coal, iron ore and crude oil, imports likely rose 20 per cent on-year, the highest since January 2013, and accelerating from 16.7 per cent growth in January, though the February readings may have been distorted by the long holiday, which impacts production and port handling. Shipments from the world's largest exporter are seen rising 12.3 per cent in February, the highest since September 2014. Exports rose 7.9 per cent in January. China's trade surplus is forecast to have dropped to $25.75 billion in February, versus January's $51.35 billion. The surplus, long an irritant with some of its major trading partners, has come under fresh scrutiny amid fears of rising US trade protectionism under new President Donald Trump. Lending seen slowing While China's trade data often steals the headlines, loan and money supply figures may come under the closest scrutiny by investors after Premier Li Keqiang said on Sunday that the economic growth target would be cut to 6.5 per cent this year to give policymakers more room to focus on reforms and erect a "firewall" against financial risks. Authorities had made similar pledges to tackle debt risks last year, even as banks extended a record amount of credit. Still, new bank lending likely eased sharply to 920 billion yuan ($133.40 billion) in February from January's 2.03 trillion, which was the second-highest monthly tally on record. Chinese banks usually "front load" loans early in the year after the government renews their credit quotas, competing fiercely to maintain market share and to lock in higher-quality borrowers as soon as possible. Growth in outstanding loans likely inched up to 12.7 per cent on-year in February, while M2 money supply likely rose 11.4 per cent, from 11.3 per cent in January. Beijing has the target for broad money supply growth this year to around 12 per cent from about 13 per cent for 2016. With the economy on more stable footing, China's central bank has moved cautiously to a tightening policy bias in recent months to contain capital outflows and rein in debt risks. It raised short-term interest rates modestly in January and February and is expected to do so again in coming months, but is seen keeping its benchmark policy lending rate steady through at least mid-2018, according to a separate Reuters poll. (Reuters)

China: February data expected to show robust growth even as debt worry looms

China&#39;s economy sprang a surprise in its last quarter as the economy grew at more-than-expected 6.8 per cent on year driven by government spending and record bank lending, Reuters reported.

The economy expanded at 6.7 per cent in 2016, according to the National Bureau of Statistics, roughly in the middle of the government&#39;s 6.5-7 per cent growth target but still the slowest pace in 26 years.

But Beijing&#39;s decision to double down on spending to meet its official growth target may have come at a high price, as policymakers will have their hands full this year trying to defuse financial risks created by an explosive growth in debt.

The world&#39;s second-largest economy also faces increased uncertainties from a cooling housing market and the government&#39;s bid to push through painful structural reforms, which could help deal with the root-cause of rising debt and housing problems but weigh on near-term growth.

Economists polled by Reuters had expected China would report 6.7 per cent growth for both the fourth quarter and the full year.&nbsp;

The economy grew 6.7 per cent in the third quarter.

While China is on more solid economic footing than this time last year, it faces increasing uncertainties in 2017, with a housing frenzy showing signs of cooling and the impact of previous stimulus measures expected to fade.

China&#39;s sluggish exports also could come under fresh pressure if US President-elect Donald Trump follows through on pledges to impose tough protectionist measures.

&quot;While Chinese growth looks stable into early 2017, a more marked slowdown by the second quarter appears inevitable,&quot; Gene Frieda, global emerging markets strategist at asset management giant PIMCO, said in a note this week.

The head of economic planning said last week that conditions have been generally stable at the start of 2017, continuing the &quot;steadying and good&quot; momentum from the second half of 2016.&nbsp;

Amid those reassuring signs of stabilisation, policy sources told Reuters that China&#39;s leaders will lower their economic growth target to around 6.5 percent this year, giving them more room to push reforms to contain debt risks.

(Reuters)

China's exports could come under pressure if US President-elect Trump follows through on his pledge to impose protectionist measures

China's economy sprang a surprise in its last quarter as the economy grew at more-than-expected 6.8 per cent on year driven by government spending and record bank lending, Reuters reported. The economy expanded at 6.7 per cent in 2016, according to the National Bureau of Statistics, roughly in the middle of the government's 6.5-7 per cent growth target but still the slowest pace in 26 years. But Beijing's decision to double down on spending to meet its official growth target may have come at a high price, as policymakers will have their hands full this year trying to defuse financial risks created by an explosive growth in debt. The world's second-largest economy also faces increased uncertainties from a cooling housing market and the government's bid to push through painful structural reforms, which could help deal with the root-cause of rising debt and housing problems but weigh on near-term growth. Economists polled by Reuters had expected China would report 6.7 per cent growth for both the fourth quarter and the full year. The economy grew 6.7 per cent in the third quarter. While China is on more solid economic footing than this time last year, it faces increasing uncertainties in 2017, with a housing frenzy showing signs of cooling and the impact of previous stimulus measures expected to fade. China's sluggish exports also could come under fresh pressure if US President-elect Donald Trump follows through on pledges to impose tough protectionist measures. "While Chinese growth looks stable into early 2017, a more marked slowdown by the second quarter appears inevitable," Gene Frieda, global emerging markets strategist at asset management giant PIMCO, said in a note this week. The head of economic planning said last week that conditions have been generally stable at the start of 2017, continuing the "steadying and good" momentum from the second half of 2016. Amid those reassuring signs of stabilisation, policy sources told Reuters that China's leaders will lower their economic growth target to around 6.5 percent this year, giving them more room to push reforms to contain debt risks. (Reuters)

China's GDP grows at 6.8% in Q4 buoyed by govt spending, bank credit

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