China 

China’s unsustainable debt levels may trigger large-scale corporate defaults, OECD warns

Risks of large-scale corporate defaults are mounting in China, despite economic growth that “remains robust by international standards”, according to a new report.The Paris-based Organisation for Economic Cooperation and Development (OECD) found that sagging domestic demand and weak export orders have led Chinese authorities to swiftly resort to stimulus measures, through expansionary monetary policy, tax cuts and infrastructure spending.The OECD is an influential intergovernmental economic… Source link

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China 

China is underestimating its US$3 trillion dollar debt and this could trigger a financial crisis

Massive domestic debt has long been a headache for Beijing, but it is China’s growing external US dollar leverage that is being underestimated and it could possibly trigger a major financial crisis, according to Kevin Lai, chief economist for Asia excluding Japan at Japanese investment bank and securities brokerage Daiwa Capital Markets. China’s US$3 trillion dollar debt makes it especially vulnerable because of tightening US dollar liquidity, a weakening yuan and the ongoing US-China trade war, said Lai. Is China about to let the yuan weaken below seven to the…

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Home 

The trade war did not trigger stock market volatility, anxiety over peaking corporate earnings did

It was a grim October for stock markets. Although punctuated by periodic rebounds, the roller coaster in global equities has hit Asia particularly hard, compounding already weak China sentiment. The brutal sell-off has tested investors’ resolve, challenging the durability of the nine-year-old bull market. Is this correction the beginning of something more sinister – a bear market? Or can equities recover from the overload of anxiety and macroeconomic risks to rally? The spike in equity market volatility during October is troubling because it’s been difficult to identify a specific cause.…

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Investment 

Speculative funds repeatedly trigger circuit breakers as Chinese start-ups endure volatile Wall Street trading

Chinese start-ups Qutoutiao, Nio and Pinduoduo experienced abrupt surges last week and repeatedly triggered circuit breakers, as analysts suspect speculative funds may have hyped up the recently listed stocks. “These recently listed IPOs all have a relatively small market float which means the stock price can be easily pushed up or down with only small amount of trading,” said Wang Guanxiong, a Beijing-based investor. He said US investors are generally not familiar with most Chinese stocks, especially newly listed companies that do not have much financial data yet. “The extremely…

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China 

Trade war escalation may trigger financial crisis in China, researchers warn

A further escalation of the trade war between Washington and Beijing to include sanctions on financial products or transactions could trigger a financial crisis in China, researchers warned in a report. The study – released on Saturday by Renmin University’s National Academy of Development and Strategy – looked at a series of possible additional retaliatory steps the US could take in the trade war to constrain, or even try to directly destroy, China’s financial markets, financial assets and its currency. China willing to talk trade but not with American ‘knife…

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