Debt is a ticking-time bomb for the Chinese economy. In the past three years central government stopped local governments from financing through investment vehicles and set a cap for the issuance of bonds. But new forms of debt continue to be formed. Local officials appear not to care about borrowing more, as long as the money can be used in projects that may translate to political achievements. And with those achievements, officials will be promoted to a higher level–as will the debt burden. A more worrisome thought will be: can those additional government debts and investments support China’s long-term growth?
The Chinese economy is slowing and that has significant ramifications for things like capital and the Renminbi. Is there a silver lining in all this?
Michael Brennan, a renowned academic in finance, on the variable interest entity structure, China’s capital markets and the internationalization of the renminbi.
This week, China’s exports and imports data showed robust growth despite forecasts that were less rosy; and Alibaba’s financial arm Alipay got a makeover.
This week, new worries about China’s economy came to the fore even as Beijing reemphasized its intent to continue with reforms; the Alibaba IPO roadshow raised huge interest in the US; and Apple’s iPhone 6 won’t be coming to China any time soon. The Slowdown Last week, a dip in China’s manufacturing Purchasing Managers Index […]
The week that was: Alibaba continued to make waves with its UCWeb buy and China Post tie-up; Baidu tied up with Vanke; and expect more Chinese IPOs in the US. Alibaba Remains Active Before IPO China’s dominant e-commerce giant Alibaba continues to make headlines this week, as the company buys out UCWeb for an undisclosed […]