Fitch has downgraded the outlook on China’s debt as it warned of increased risks to the economy while the country moves away from its reliance on growth from the property sector. On Wednesday the US-based agency said it had revised China’s sovereign credit rating from stable to negative, saying this reflected the “increasing risks to China’s public finance outlook” as the country “contends with more uncertain economic prospects”. The downgrade comes amid a prolonged crisis in the country’s property sector that has been running since 2021, when a regulatory crackdown…
Tag: Chinese economy
Huawei shrugs off US sanctions with fastest growth in four years
Chinese telecoms firm Huawei grew faster in 2023 than it has for four years, as it shrugged off the impact of US sanctions. Revenues rose by nearly 10% to 704.2bn yuan (£77bn) as the Shenzhen-based company enjoyed a rebound within its consumer segment, which includes smartphone handsets. The performance meant Huawei defied the effect of sanctions imposed by the US in 2019, when Donald Trump’s White House accused the firm of being a security risk, something Huawei denies. The UK also vowed in 2020 to remove Huawei from 5G infrastructure…
World’s largest solar manufacturer to cut one-third of workforce
The world’s largest solar manufacturer has slashed nearly a third of its workforce after a cost-cutting drive that included telling staff to only print in black and white fell short and as a chill ripples through the renewable energy sector. China’s Longi is to cut as much as 30% of its workforce, in an acceleration of cost reductions that began late last year, Bloomberg reported. It is unclear exactly how many jobs will be lost at the company, which employed 80,000 at its peak last year, as an internal function…
Honda and Nissan join forces on electric car technology to chase Chinese rivals
Honda and Nissan have put aside the “traditional approach” of fierce rivalry to join forces and work together on electric vehicle technology as Japan’s carmakers try to catch up with Chinese competitors. The Japanese manufacturers will work together on technology for EVs, including components and software, after signing a memorandum of understanding on Friday. Honda and Nissan, respectively the country’s second- and third-largest carmakers behind Toyota, aim to cut costs by combining resources. Traditional manufacturers are struggling to compete profitably with upstart rivals as the electric vehicle sector grows rapidly,…
China may be facing too many economic obstacles to hit its ambitious growth target for 2024
Chinese leaders who have been predicting an end to the country’s deflation would have been heartened by official statistics this week showing consumer prices had increased for the first time in six months. The news came as the ruling Communist party used its annual gathering in Beijing to declare the economy would clock up growth of “around 5%” in 2024. However in his speech, Premier Li Qiang warned dutiful delegates they “should not lose sight of worst-case scenarios and should be well prepared for all risks and challenges”. And little…
Embattled China property giant Country Garden faces liquidation petition
Country Garden Holdings has said a liquidation petition has been filed against the property developer for non-payment of a loan worth $205m, adding to the woes for China’s liquidity crisis-hit property sector. Country Garden said in a regulatory filing to the Hong Kong Stock Exchange it would “resolutely” oppose the petition, which was filed by a creditor, Ever Credit Limited, a unit of Kingboard Holdings. A court hearing has been set for 17 May. Country Garden’s shares fell more than 12% in early trading on Wednesday. The petition is set…
‘It’s legalised robbery’: anger grows at China’s struggling shadow banks
Wang Jin felt sure that he could invest in Sichuan Trust, an institution that was part of one of what he describes as the “four pillars” of China’s financial system: banks, securities, insurance and trusts. Promised a return on his investment of 8.3%, he handed over 1.6m yuan (£178,000) in 2019. “The trust had a state licence, so we believed in its integrity,” Wang (not his real name) recalls. Unluckily for him, in May 2020, the company said that it would be unable to repay 20bn yuan of investments. Protests…
China holds citizen on spying charges after she did ‘admin’ work for US company
China has detained one of its citizens on spying charges after she did some work for a US company, in a case that experts say highlights the potential risks of working for foreign businesses in the country. Emily Chen, 50, disappeared after flying into Nanjing Lukou international airport in December on a visit from Doha, where she lives. According to her husband, US citizen Mark Lent, Chen messaged her family to say that she had landed but she then did not emerge from the airport. Four days later, her son…
China has seen a fourth month of falling prices, but will it act to curb deflation?
China’s economy has gone from bad to worse – and it is only February. Figures released on Thursday showed consumer prices fell by 0.8% in January compared with a year earlier, outstripping economists’ expectations and marking the biggest contraction in 15 years. Prices in China have been flat or falling nearly continuously since July. Although the country’s zero-Covid policy was abandoned more than a year ago, consumers are still cautious about spending, both on everyday goods and on property, which has traditionally been the driver of growth in China’s gross…
China consumer prices plunge at fastest rate for 15 years as deflation fears deepen
China’s consumer prices fell at their fastest pace in 15 years in January, as the world’s second-largest economy sank deeper into deflation amid weakening demand. Data released on Thursday showed that China’s consumer price index tumbled last month, falling by 0.8% compared with a year earlier. It marks the fourth consecutive month of declines, as well as the sharpest drop since September 2009, when the global economy was still grappling with aftershocks from the 2008 banking crisis. Food prices were the biggest drag on the headline inflation figure, having fallen…