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Free trade, open borders, taco trucks on every corner. Latest discussion thread: April 2024 **We in m/Neoliberal support:** - Free trade and competitive markets

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Democracy, human rights, civil liberties and due process Neoliberals can be found in many political parties and we are not dogmatic supporters of specific parties. But we tend to find ourselves agreeing more often with parties that espouse liberal values, internationalism and centrist economics, such as the Democrats in the US, Liberal Democrats in the UK, FDP in Germany, Renaissance/MoDem in France, the Liberal Party in Canada, and so on. **Further reading** - I’m a neoliberal. Maybe you are too.
The neoliberal mind
Neo-liberalism and its prospects
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Vox https://www.vox.com/

founded 1 year ago

Evergrande files for US bankruptcy protection as China economic fears mount (www.reuters.com)

submitted 1 year ago by CoffeeAddict@kbin.social to c/Neoliberal@kbin.social

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Embattled developer China Evergrande Group has filed for U.S. bankruptcy protection as part of one of the world's biggest debt restructurings, as anxiety grows over China's worsening property crisis and its impact on the weakening economy.

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[–] CoffeeAddict@kbin.social 1 points 1 year ago (1 children)

DOMINO EFFECT?

The property crisis has also fanned worries about contagion risks to the financial system, which could have a destabilising impact on an economy already weakened by tepid domestic and foreign demand, faltering factory activity and rising unemployment.

A major Chinese asset manager has missed repayment obligations on some investment products and warned of a liquidity crisis, while Country Garden (2007.HK), the country's No.1 private developer, has become the latest to flag a stifling cash crunch.

Angry investors in trust products of Zhongrong International Trust Co., a unit of the asset manager, have lodged complaint letters with regulators, pleading with the authorities to step in after the trust firm missed payments.

Nomura on Friday followed some of the major global brokerages to cut China's growth forecast for this year. It now sees China's gross domestic product (GDP) growing 4.6% this year, down from an earlier forecast of 5.1%, but much of that growth may have come in the first quarter after strict COVID curbs were lifted.

China is targeting 5% growth for this year, but an increasing number of economists are warning that it could miss the goal unless Beijing ramps up support measures.

China's economic and property woes and the absence of concrete stimulus steps have sent a chill through global markets. Asian shares (.MIAPJ0000PUS) posted a third straight week of declines. Chinese blue-chips (.CSI300) dropped 1.2% on Friday and Hong Kong's Hang Seng Index (.HSI) slumped 2.1%.

In an attempt to boost investor confidence, China securities regulator said on Friday it would cut trading costs and support share buybacks as it unveiled measures aimed at reviving the stock market.

But so far, the scope of support that Beijing has offered has underwhelmed financial markets, with some analysts wondering if policymakers are reluctant to risk adding to a mountain of debt created in part by massive stimulus in the past.

"To be sure, the economic downturn is putting a great deal of strain on financial sector balance sheets, and it does increase the risk of a messy policy mistake if officials don’t handle the situation with care. But we still think a full-blown financial crisis is a tail risk rather than a probable outcome," Capital Economics said in a report.

[–] CoffeeAddict@kbin.social 1 points 1 year ago

DEBT RESTRUCTURING

China's central bank reiterated it would adjust and optimise property policies, according to its quarterly policy implementation report this week.

Since mid-2021, companies accounting for 40% of Chinese home sales have defaulted, most of them private property developers.

Longfor Group (0960.HK), China's second largest private developer, said on Friday it would try to boost profitability in response to changing supply and demand.

The Beijing-based developer posted a 0.6% rise in first-half core profit, and said it would strive to return to positive cash flow this year and not take on new interest-bearing debt.

"The China property sector is like a black hole, so many developers have been dragged into it since two years ago after Evergrande," said Winner Zone Asset Management CEO and CIO Alan Luk.

"The central government has yet to introduce (strong) measures because this is too large a hole to fill."

Reporting by Clare Jim in Hong Kong, Jonathan Stempel and Dietrich Knauth in New York, and Manya Saini in Bengaluru; Writing by Sumeet Chatterjee; Editing by Shri Navaratnam and Kim Coghill