Risk Watch: China Central Bank-backed Media Signals Severe Debt Crisis

China’s Financial News published an article on May 22 titled, “‘Breach of Contract’ Force Reshaping of Bond Market Rules,” that commented on the recent cover-up of contract breaches in China. The article noted that “breaching contracts has become a trend in China’s bond markets,” and that the phenomenon is a “mandatory lesson” for businesses in …

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Risk Watch: Rising Property Prices in Chinese Cities Expose Central-Local Policy Contradictions

On May 16, China’s National Bureau of Statistics released data on the changes in the sales price of commercial housing in 70 large and medium-sized cities in April. According to the data, housing prices in 58 of the 70 cities saw an increase month-on-month. Prices of second-hand homes in 59 cities also rose from the …

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Risk Watch: Has China’s 2018 Bond Default Tsunami Arrived?

With many Chinese bonds reaching maturity date this year and Sino-U.S. trade tensions persisting, a corporate debt crisis could be on the horizon in China. Since the start of 2018, 17 Chinese bonds have defaulted. Ten of the bond issuers were listed companies, and the total amount involved was 14.56 billion yuan ($2.30 billion). The …

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Risk Watch: China Could Tighten Real Estate Control Policies

Mainland Chinese media reported that real estate speculators had been recently driving up property prices in China’s third-tier cities by two or three times. These speculators were also found to have collaborated with local governments to bring up land prices. One case involved a group of speculators raising 200 million yuan (about $31.5 million) before …

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Politics Watch: More Signs of Good Progress on Sino-US Trade Talks

Most observers believe that that the Sino-U.S. trade discussions in Beijing from May 3 to May 4 did not pan out well for both sides and no deal was reached. There are also worries that an all-out trade war would come to pass. Based on our research, however, we believe that China and the U.S. …

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Can China Withstand a Trade War? An Analysis of Provincial Finances

Sino-U.S. trade tensions have been a concern in recent weeks. Publicly, neither the United States nor China appears to be willing to give up ground. Chinese state media, in particular, has declared that China wouldn’t back down in a trade war. But can China withstand a trade war? An examination of the financial state of …

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Politics Watch: Decoding the Outcome of Sino-US Trade Talks

Two days of high-level Sino-U.S. trade talks in Beijing concluded on May 4. Neither side provided specifics on the outcome of the discussions. Chinese state mouthpiece Xinhua said that the talks, which were led by vice premier Liu He on the Chinese side, were “constructive, candid and efficient,” but disagreements between the two countries remain …

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Risk Watch: Property Prices Skyrocket in Chinese Border Town in Anticipation of North Korean Liberalization

Since April 21, property prices in China’s Dandong City have kept rising. Dandong faces North Korea’s Sinuiju City across the Yalu River. After the April 27 inter-Korean summit at Panmunjom, property prices in Dandong rose by 57 percent over two days. The backdrop: Dandong, a prefecture-level city in Liaoning Province, is the city that carries …

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Risk Watch: Central Bank Official Cautions Alibaba, Tencent on Payment Industry Compliance

Fan Shuangwen, the deputy head of the Department of Payment and Settlement at the People’s Bank of China (PBoC), issued a warning to large payment companies on April 26. Big payment companies shouldn’t act like they are “too big to fail” or “too big to be managed,” Fan told mainland Chinese media. Neither should these …

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Risk Watch: US ZTE Ban Exposes China’s Tech Industry Vulnerabilities

On April 16, the United States Department of Commerce banned American companies from selling services, software, or components to ZTE Corp, a state-supported Chinese telecommunications manufacturer, for seven years (until 2025, March 13). The ban was imposed because ZTE broke an agreement reached with the U.S. government after it was caught illegally shipping U.S. goods …

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