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☆ Evergrande’s Hong Kong court ruling is big reprieve
▼ + stars: | 2023-12-04 | by ( ) www.reuters.com time to read: +2 min

HONG KONG, Dec 4 (Reuters Breakingviews) - A Hong Kong court on Monday adjourned to next month a hearing over a petition for the liquidation of China Evergrande (3333.HK). It lobs the ball back to Beijing: the judge told Evergrande to hold direct discussion with “relevant authorities” on the revamped terms. Options are limited following the detention of the company’s Chair Hui Ka Yan in September on suspicion of unspecified crimes. It also defers a high-profile test on whether Hong Kong liquidation rulings over mainland companies would be implemented across the border more efficiently following the introduction of a limited mutual recognition pact in 2021. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

Persons: Evergrande, Hui Ka Yan, Chan Ka, Neiman Marcus, Una Galani, Thomas Shum Organizations: Reuters, Hong, HK, X, Saks, Barclays, Thomson Locations: HONG KONG, Hong Kong, China, Beijing

☆ Foxconn is still running with difficult status quo
▼ + stars: | 2023-11-27 | by ( Chan Ka Sing | ) www.reuters.com time to read: +3 min

HONG KONG, Nov 27 (Reuters Breakingviews) - Terry Gou is not running for Taiwan’s presidency after all. Nonetheless, the $45 billion Apple (AAPL.O) supplier’s continuing push to move production outside of China leaves it firmly on frontlines of rising cross-strait tensions. Foxconn grew into the biggest employer in China, with more than 1 million workers at its peak and a top contract manufacturer for global brands. Foxconn is out of the election spotlight but it still has to grapple with an awkward status quo. CONTEXT NEWSTerry Gou, the billionaire founder of electronics maker Foxconn, announced on Nov. 24 that he will be withdrawing from Taiwan’s presidential election next month.

Persons: Terry Gou, Critics, Foxconn, Una Galani, Thomas Shum Organizations: Reuters, Apple, Democratic Progressive Party, DPP, KMT, Hai Precision Industry, World Trade Organization, Reuters Graphics, China -, Foxconn, Taipei Times, Thomson Locations: HONG KONG, China, Washington, Beijing, Taiwan, Kuomintang, Taipei

☆ Iron ore gains on China’s property debt-rejig pain
▼ + stars: | 2023-11-24 | by ( ) www.reuters.com time to read: +2 min

A steel worker of ThyssenKrupp stands amid sparks of raw iron coming from a blast furnace at a ThyssenKrupp steel factory in Duisburg, western Germany, January 30, 2020. The benchmark December iron ore futures contract on the Singapore Exchange is up 10% this month at $133.45 a ton on hopes Beijing will kickstart the property sector. Anticipating spiking demand from the world’s second largest economy, Citi analysts on Tuesday upgraded their forecast iron ore price to $140 per ton. The optimism on iron ore could further grow if Beijing rolls out more structural reforms, such as the provision of social housing. China’s demand for steel in electric vehicles and green infrastructure has already kept average prices high despite the property slump.

Persons: Wolfgang Rattay, Chan Ka, Una Galani, Thomas Shum Organizations: REUTERS, Reuters, Singapore Exchange, Citi, Hong Kong, HK, X, Thomson Locations: ThyssenKrupp, Duisburg, Germany, HONG KONG, China, Beijing, HK, Rome

☆ China’s property boost has to sway wary banks
▼ + stars: | 2023-11-15 | by ( Chan Ka Sing | ) www.reuters.com time to read: +4 min

That didn’t work because lenders balked at increasing their exposure to over-leveraged real estate groups. Xi needs to articulate a broader plan to restore banks’ confidence in the troubled property sector. Beijing’s problem is that the cash it doles out may not reach the intended targets because banks are reluctant to pass it on to property developers. Chinese banks heeded the strong signal coming from Beijing. Still, simply throwing money at reluctant banks won’t help heal the current real estate wounds.

Persons: Aly, homebuyers, Xi, shantytown redevelopments, ”, Francesco Guerrera, Thomas Shum Organizations: REUTERS, Reuters, People’s Bank of China, Authorities, Bloomberg, Financial Times, Reuters Graphics Reuters, Thomson Locations: Guangfuli, Shanghai, China, HONG KONG, Beijing, shantytown

☆ China’s Singles Day shows buyers’ commitment issue
▼ + stars: | 2023-11-13 | by ( Chan Ka Sing | ) www.reuters.com time to read: +3 min

The Alibaba Group logo is seen during the company's 11.11 Singles' Day global shopping festival at their headquarters in Hangzhou, Zhejiang province, China, November 11, 2020. The Singles Day sales period ended up with anemic growth in transactions, despite steep discounts by retailers. Alibaba (9988.HK), , the e-commerce giant behind Singles Day, used to hold a lavish gala in Shanghai to celebrate the consumption extravaganza. And China’s State Post Bureau said on Sunday that express delivery volume hit a record high during the Singles Day period, rising more than 23% between November 1 and November 11, compared to the previous year. Beijing may hope Chinese shoppers are more fatigued by the Singles Day’s barrage of promotions than consumption itself.

Persons: Aly, Xi, Taylor Swift, Alibaba, It’s, JD.com, Goldman Sachs, Francesco Guerrera, Thomas Shum Organizations: REUTERS, Reuters, HK, Post Bureau, Reuters Graphics Reuters, Thomson Locations: Hangzhou, Zhejiang province, China, HONG KONG, Shanghai, Beijing

☆ China rate scare reminds watchdogs of hidden risks
▼ + stars: | 2023-11-01 | by ( Chan Ka Sing | ) www.reuters.com time to read: +3 min

Overnight borrowing rates for some Chinese financial institutions spiked to 50% on Tuesday, according to official interbank data, far in excess of the average rate of roughly 3.6%. In 2012, a national audit confirmed that local governments had amassed up to 10 trillion yuan in debts. Those have since swelled to 92 trillion yuan, per Reuters. The latest liquidity squeeze is a reminder that short-term dangers will complicate any attempts at more drastic surgery on China’s financial system. CONTEXT NEWSOvernight borrowing costs for some Chinese financial institutions jumped to as high as 50% on Oct. 31.

Persons: Xi Jinping’s, Xi Jinping, Li Qiang, Peter Thal Larsen, Thomas Shum Organizations: Reuters, Traders, People’s Bank of, Financial Work, Central Financial Work Conference, Xinhua News Agency, Thomson Locations: HONG KONG, People’s Bank of China, Beijing

☆ China puts $137 bln Band-Aid on local debt wounds
▼ + stars: | 2023-10-25 | by ( Chan Ka Sing | ) www.reuters.com time to read: +3 min

The funds are to be funnelled to cash-strapped local governments struggling under 92 trillion yuan ($12.6 trillion) of debt. The last time was for a 1 trillion yuan special bond issuance in 2020 to combat the economic fallout from Covid-19. All these plans stem from the ruling Politburo in July calling on regulators to formulate “a basket of measures” to resolve risks stemming from local governments’ debt. CONTEXT NEWSChina’s top legislature approved a plan on Oct. 24 to sell 1 trillion yuan ($137 billion) of sovereign bonds. Separately, the Chinese legislature passed a bill to allow local governments to frontload part of their 2024 bond quotas.

Persons: Xi Jinping, Xi Jinping’s, Antony Currie, Thomas Shum Organizations: of, People, REUTERS Acquire, Reuters, Monetary, Thomson Locations: Beijing, China, HONG KONG, Covid

☆ Foxconn’s China woes expose supply chain dilemma
▼ + stars: | 2023-10-24 | by ( Chan Ka Sing | ) www.reuters.com time to read: +4 min

Yet, coming less than 100 days ahead of Taiwan’s presidential election in January, it is difficult to see surprise tax raids on Foxconn as having no geopolitical implications. For multinationals, the tax audits expose Foxconn’s difficulty in navigating the global business environment as tensions across the Taiwan Strait escalate. For global onlookers anxious to reduce their Chinese dependency, Foxconn could be the most telling case on the true cost of reshoring. The audits come less than three months ahead of Taiwan’s presidential election in January 2024 and amid Foxconn’s drive to expand its production outside China. Foxconn’s founder Terry Gou, who stepped down as company chief in 2019, is running as an independent candidate in Taiwan’s upcoming presidential election.

Persons: Foxconn, Terry Gou, It’s, Foxconn’s, Lisa Jucca, Thomas Shum, Katrina Hamlin Organizations: Reuters, Apple, Hai Precision Industry, Global Times, Eastern, Democratic Progressive Party, Foxconn, Thomson Locations: HONG KONG, China, Taiwan, Foxconn, Beijing, Vietnam, Republic, Shanghai, Taipei

☆ China’s GDP allows room for stimulus waiting game
▼ + stars: | 2023-10-18 | by ( Chan Ka Sing | ) www.reuters.com time to read: +3 min

HONG KONG, Oct 18 (Reuters Breakingviews) - For any major economy, 5% growth ought to be respectable. Yet anxiety over the attainability of that official target this year is one reason China's policymakers have faced growing calls from global stakeholders for more stimulus. The country’s GDP has grown 5.2% in the first nine months of this year. The world’s second-biggest economy grew 5.2% in the first nine months of 2023. The Chinese government has set a 5% growth target for this year.

Persons: Una Galani, Thomas Shum Organizations: Reuters, Services, National Bureau, Statistics, Thomson Locations: HONG KONG, Beijing, China

☆ China’s timid bank buying sends rescue signals
▼ + stars: | 2023-10-12 | by ( Chan Ka Sing | ) www.reuters.com time to read: +3 min

The call was partly answered on Wednesday evening by Central Huijin Investment, though not quite in the way it was hoped. The state fund boosted its controlling stakes in the Big Four lenders by just a few basis points. It spent a 477 million yuan ($65 million) on Industrial and Commercial Bank of China (601398.SS), (1398.HK), China Construction Bank (601939.SS), (0939.HK) and Bank of China (601988.SS), (3988.HK), and Agricultural Bank of China (601288.SS), (1288.HK). It’s a tiny amount but Central Huijin said it plans to keep adding over to the next six months to its holdings already worth 2.5 trillion yuan. The state fund is the biggest shareholder in Bank of China, Agricultural Bank of China, China Construction Bank and Industrial & Commercial Bank of China.

Persons: Huijin, Central Huijin, Xi Jinping’s, Una Galani, Thomas Shum Organizations: Reuters, Central Huijin Investment, Big, Industrial, Commercial Bank of China, HK, China Construction Bank, Bank of China, Agricultural Bank of China, outflows, of International Finance, Huijin Investment, Agricultural Bank of, Thomson Locations: HONG KONG, China, Beijing, Central, Hong Kong, China’s, Bank, Agricultural Bank of China

☆ China has reason not to let Evergrande rejig rot
▼ + stars: | 2023-10-03 | by ( Chan Ka Sing | ) www.reuters.com time to read: +4 min

Yet Evergrande creditors are nonetheless in limbo. Up to 44% of Evergrande’s 558 billion yuan of interest-bearing debt is unsecured, of which a large chunk is held by offshore creditors. If the company is forced into liquidation, unsecured offshore creditors will recover less than 10 billion yuan, Evergrande has warned, with some facing a recovery rate as low as 2%. Evergrande was trying to reach an agreement with offshore creditors first before tackling issues onshore. It also cancelled meetings due to be held with creditors on Sept. 25 and Sept. 26.

Persons: Hui Ka Yan, Evergrande, ”, Sunac, Hui’s, Una Galani, Katrina Hamlin Organizations: Reuters, HK, Guangdong International Trust and Investment Corporation, Street, China Evergrande, Thomson Locations: HONG KONG, China, Guangdong, Republic, Hong Kong

☆ China may finally nick some metals clout from LME
▼ + stars: | 2023-09-20 | by ( Chan Ka Sing | ) www.reuters.com time to read: +3 min

The debacle has undermined the venue’s benchmark status in the pricing of nickel, which is essential for making electric vehicles. LME’s trading volumes of the element were down 40% in July from a year earlier. That’s probably why the Shanghai Futures Exchange (ShFE) is now planning its own nickel futures contract for international use, Reuters reported on Sept. 13. For the Shanghai exchange, venturing in the opposite route could also prove difficult. CONTEXT NEWSThe Shanghai Futures Exchange is planning to launch a nickel futures contract for international use, Reuters reported on Sept. 13.

Persons: Tsingshan, ShFE, HKEx, Lisa Jucca, Katrina Hamlin Organizations: Reuters, Hong Kong Exchanges, HK, London Metal Exchange, Asian bourse, Shanghai Futures Exchange, Reuters Graphics, Thomson Locations: HONG KONG, British, China, Beijing, Indonesia, Shanghai

☆ China's property price caps have two sharp edges
▼ + stars: | 2023-09-18 | by ( Chan Ka Sing | ) www.reuters.com time to read: +4 min

REUTERS/Tingshu Wang/File Photo Acquire Licensing RightsHONG KONG, Sept 18 (Reuters Breakingviews) - Chinese developers are in trouble. When the mood was bullish, price caps in major cities were far below what people were willing to pay. Scrapping the price caps would be a cleaner fix and officials are weighing up such a move, Reuters reported this month. CONTEXT NEWSChina's Guangzhou city has cancelled price caps on new residential projects, Caixin reported on Sept. 12. Price caps of various kinds were introduced in many Chinese cities from 2016 following the central government’s call for a stable residential market.

Persons: Zhao Youming, Tingshu Wang, Caixin, Price, Una Galani, Thomas Shum Organizations: Gaotie Wellness, REUTERS, Reuters, HK, Bureau of Statistics, Thomson Locations: Tongchuan, Shaanxi, China, HONG KONG, Guangzhou

☆ China’s cautious property giants may be rewarded
▼ + stars: | 2023-09-08 | by ( Chan Ka Sing | ) www.reuters.com time to read: +4 min

Yu Liang, president of China Vanke Co Ltd, China's top property developer, attends a news conference announcing the company's annual results in Hong Kong March 6, 2014. China Vanke Co Ltd on Thursday posted a 20.5 percent rise in net profit for 2013, in line with estimates, driven by record contracted sales last year. Yu Liang told investors last week that the property market in the world’s second-largest economy was “oversold”. The chair of $22 billion China Vanke (000002.SZ) is worth listening to. On the same day, the company reported a 19% decline in net profit to 9.9 billion yuan ($1.35 billion) for the six months to the end of June.

Persons: Yu Liang, Bobby Yip, ”, Vanke, homebuyers, Xi Jinping, Xi, Una Galani, Thomas Shum Organizations: China Vanke Co, REUTERS, Reuters, China, Mainland, HK, Securities Times, Shenzhen Metro Group, Thomson Locations: China, Hong Kong, HONG KONG, Shenzhen, Evergrande’s

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