Fears about the health of the global economy have intensified following downbeat news about service sector activity in China, the eurozone and the UK. Share prices fell in Asia and the pound dropped to a 12-week low against the US dollar after fresh signs of weakness in China triggered speculation that its post-lockdown recovery was running out of steam. Meanwhile, there were signs the steady rise in interest rates is leading to weaker service sector activity in both the UK and the 20-country eurozone. Markets were particularly rattled by news…
Tag: Chinese economy
Country Garden shares jump after Chinese developer strikes debt deal
The share price of the ailing Chinese developer Country Garden has jumped by as much as a fifth after its creditors agreed a delay on debt repayments, offering some respite from the country’s crisis-hit property market. The company agreed over the weekend to extend the payment dates on a 3.9bn yuan (£430m) private bond, to the relief of investors who had thought it would default on payments due on Saturday. Country Garden will instead have three years to repay the debt, after it won a narrow vote with the backing…
Yang Huiyan: Country Garden owner who was once Asia’s richest woman
Just two years ago she was the richest woman in Asia with an estimated $29.6bn (£23.4bn) fortune, but now Yang Huiyan, the chair and majority owner of Chinese property developer Country Garden Holdings, is battling to save the company from collapsing into default. Country Garden, which was founded by Yang’s father – a farmer – in 1992, had grown to become China’s largest property developer, completing thousands of projects across the country. As the Chinese property bubble bursts, the company is now fighting for its very survival and Yang’s billions…
The Guardian view on the UK and China: Britain is muddling along in dealing with Beijing | Editorial
There’s an old joke about a lost traveller asking how to reach their destination. The local they stop helpfully tells them: “If I were you, I wouldn’t start from here.” The foreign secretary made it to Beijing on Wednesday, but finds himself in something of the same situation when it comes to China policy. In a report published the same day, the foreign affairs committee rightly diagnosed a lack of coherence in the UK government’s approach to date. James Cleverly began from an unenviable position. For too long, the west…
China continues coal spree despite climate goals
China is approving new coal power projects at the equivalent of two plants every week, a rate energy watchdogs say is unsustainable if the country hopes to achieve its energy targets. The government has pledged to peak emissions by 2030 and reach net zero by 2060, and in 2021 the president, Xi Jinping, pledged to stop building coal powered plants. But after regional power crunches in 2022, China started a spree of approving new projects and restarting suspended ones. In 2022 the government approved a record-breaking 86 gigawatts (GW) of…
Evergrande shares plunge further amid China economy fears
Shares in Evergrande fell another 13% on Tuesday after more than $2bn was wiped off the Chinese property developer’s market value when it resumed trading for the first time in almost 18 months on Monday. Evergrande, the world’s most indebted property firm with liabilities of $328bn (£260bn), has lost more than 99% of its share market value over the past three years. The company resumed trading on the Hong Kong stock exchange on Monday after a 17-month suspension which Evergrande used to try to restructure its offshore debt. However, investors…
She Rose From Poverty as China Prospered. Then It Made Her Poor Again.
Two years ago, as she walked through a hospital hallway in handcuffs and shackles to get tested for Covid, Sun Junli felt ashamed and defeated. At 45, she had come a long way. The poor village girl in northwestern China had become a successful businesswoman. Then she was crushed. In 2018, state-owned banks abruptly stopped lending to her business, a chain of cafe restaurants, and the pandemic destroyed her cash flow. By May 2021, Ms. Sun had lost her restaurants, and she was serving 16 days in detention for owing…
How can the US and China prevent a war? | Nouriel Roubini
The US and China remain on a collision course. The new cold war between them may eventually turn hot over the issue of Taiwan. The “Thucydides trap” – in which a rising power seems destined to clash with an incumbent hegemon – looms ominously. But a serious escalation of Sino-American tensions, let alone a war, can still be avoided, sparing the world the cataclysmic consequences that would inevitably follow. There will always be at least some tensions when a rising power challenges the prevailing global power. But China is facing…
How China Made Its Housing Crisis Worse
In China the pension akin to Social Security in the United States pays about $410 a month to seniors who live in cities, and only $25 a month in the countryside. Public health care covers less than half of people’s costs. Unemployment insurance provides around $220 a month; the U.S. average is nearly $1,700. China’s consumer safety net is full of holes, even when accounting for lower costs of living compared to the United States. As growth has faltered in recent years, and now as a simmering real estate crisis…
China’s economic model is faltering – does it have the political will to fix it? | George Magnus
The long days of summer are proving to be rather too long for the government in Beijing. In an attempt to stabilise the faltering real estate market, the authorities announced earlier this week a modest decline in interest rates that was underwhelming in scale and intent. Those who recall the bad old days in which the west was buffeted by successive crises such as those involving Northern Rock, Bear Stearns and Lehman Brothers will recognise the futility of lower interest rates in stemming systemic problems in real estate and finance…