China Economy Forum
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rott
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You should be happy. Chinese would become more poorer and you can save your Viet wife.that is not a good sign. I am very concerned. seems China economic miracle is coming to the end.
soon millions of Chinese will lose their jobs and houses. CCP should brace for protests among their unhappy citizens. revolts may emerge in Chinese cities. hope that won´t be a Chinese spring.
good for the neighbors of China. the bullying may stop
but we will see whether thousands of Chinese refugees come again and knock on Vietnam door as they did after the collapse of the Ming dynasty. I have to tell that hostile Chinese posters against Vietnam here are not qualified for asylum
shuttler
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The best way to attract a large swarm of hateful, dirty and hungry flies is when we shit!
Xinhua Insight: China's exports down 6.6 pct in March
English.news.cn 2014-04-10 18:08
BEIJING, April 10 (Xinhua) --- China's exports slumped 6.6 percent year on year in March mainly due to a large base figure inflated by rampant over-invoicing in the corresponding period last year, customs data showed on Thursday.
Exports dropped to 170.11 billion U.S. dollars and imports were down 11.3 percent to 162.41 billion U.S. dollars, the General Administration of Customs (GAC) said.
Total foreign trade volume declined 9 percent over the previous year to 332.52 billion U.S. dollars, and the trade balance returned to a surplus of 7.71 billion U.S. dollars in March after a deficit in the previous month, according to the administration.
In the first quarter, combined exports and imports declined 1 percent year on year to 965.88 billion U.S. dollars.
GAC spokesman Zheng Yuesheng played down the drop in exports, attributing it to a high base figure in March last year that was distorted by illicit transactions through Hong Kong.
Exports at this time last year were significantly inflated due to over-invoicing to disguise capital flows and evade currency controls. In the first quarter of 2013, illicit transactions through Hong Kong allowed exports to balloon by more than 20 percent year on year, previous figures showed.
Zheng said China's trade with all major partners grew in the first quarter with the exception of trade with Hong Kong, which recorded a sharp 33.3-percent drop year on year.
China's trade with the European Union, the United States, Japan and the ASEAN rose 6.3 percent, 0.9 percent, 2.6 percent and 2 percent respectively over a year ago in the first three months.
"The slump in trade with Hong Kong drove down the overall growth in the first quarter by about 4 percentage points," said Zheng.
"Trade with Hong Kong returned to normal in mid-April last year, so we expect China's export growth to Hong Kong to pick up significantly in May this year," he explained.
"The declining trend in exports will be temporary and short-lived. China's foreign trade will recover in May," the spokesman forecast.
Zheng's view is echoed by Zhang Zhiwei, chief China economist with Japan's Nomura Securities.
"Taking into account the issue of mis-invoicing in export data, we believe actual export growth may have improved to 5 to 8 percent year on year in March from around 3 percent in the Jan.-Feb. period," wrote Zhang in a research note.
The GAC's Zheng also pointed out some underlying strength in exports. Exports of labor-intensive products, despite a decline of 6.4 percent in the first two months, registered a 6.8-percent growth in March, reflecting the country's competitiveness in the global trade, he said.
China also saw a rise in exports of cellphones, vehicles and cables in the Jan.-March period.
Zheng said imports declined due to lower commodity prices in the world market, citing a drop in the overall import price index.
The index stood at 95 in the first quarter, indicating a 5-percent drop in the prices of imports over a year ago. Meanwhile, the index for overall import volume stood at 104, meaning an increase of 4 percent in the amount of imports.
Although China is faced with downside economic pressure, its demand for commodities from the global market kept stable, Zheng noted.
He predicted that China's exports will see moderate growth this year, helped by recovery in the global economy, China's reform initiatives and the country's opening-up efforts.
Despite more competition from neighboring countries and regions and trade frictions with major trade partners, it is very likely that China can achieve its trade growth target of 7.5 percent this year, said Zheng.
Chinese Premier Li Keqiang on Thursday expressed confidence that the country can keep its economy functioning within the proper range.
"With all the principles established and policy options at our disposal, we can handle all possible risks and challenges. China's development has strong resilience," said Li at the opening ceremony of the Boao Forum for Asia (BFA) annual conference 2014.
"We will not resort to short-term stimulus policies just because of temporary economic fluctuations and we will pay more attention to sound development in the medium and long run," according to the premier.
Li last week chaired a State Council meeting where growth-supportive steps were announced including cutting tax for small businesses, facilitating shanty-town renovation and speeding up railway construction.
Rather than being seen as stimulus policies, it is believed that these fine-tuning measures will stabilize growth by enhancing economic efficiency while avoiding future financial troubles.
HSBC Chief China Economist Qu Hongbin said the policy package, combined with implementation of reform measures such as lower entry barriers for private investment and abolishing more unnecessary administrative approvals, could provide a cushion for China's economic growth as well as import demand.
Zhang Zhiwei also said there is scope for the government to stay the policy course and not announce new easing measures in April as it waits to see how the economy responds to the measures announced in recent weeks.
Xinhua Insight: China's exports down 6.6 pct in March - Xinhua | English.news.cn
Xinhua Insight: China's exports down 6.6 pct in March
English.news.cn 2014-04-10 18:08
BEIJING, April 10 (Xinhua) --- China's exports slumped 6.6 percent year on year in March mainly due to a large base figure inflated by rampant over-invoicing in the corresponding period last year, customs data showed on Thursday.
Exports dropped to 170.11 billion U.S. dollars and imports were down 11.3 percent to 162.41 billion U.S. dollars, the General Administration of Customs (GAC) said.
Total foreign trade volume declined 9 percent over the previous year to 332.52 billion U.S. dollars, and the trade balance returned to a surplus of 7.71 billion U.S. dollars in March after a deficit in the previous month, according to the administration.
In the first quarter, combined exports and imports declined 1 percent year on year to 965.88 billion U.S. dollars.
GAC spokesman Zheng Yuesheng played down the drop in exports, attributing it to a high base figure in March last year that was distorted by illicit transactions through Hong Kong.
Exports at this time last year were significantly inflated due to over-invoicing to disguise capital flows and evade currency controls. In the first quarter of 2013, illicit transactions through Hong Kong allowed exports to balloon by more than 20 percent year on year, previous figures showed.
Zheng said China's trade with all major partners grew in the first quarter with the exception of trade with Hong Kong, which recorded a sharp 33.3-percent drop year on year.
China's trade with the European Union, the United States, Japan and the ASEAN rose 6.3 percent, 0.9 percent, 2.6 percent and 2 percent respectively over a year ago in the first three months.
"The slump in trade with Hong Kong drove down the overall growth in the first quarter by about 4 percentage points," said Zheng.
"Trade with Hong Kong returned to normal in mid-April last year, so we expect China's export growth to Hong Kong to pick up significantly in May this year," he explained.
"The declining trend in exports will be temporary and short-lived. China's foreign trade will recover in May," the spokesman forecast.
Zheng's view is echoed by Zhang Zhiwei, chief China economist with Japan's Nomura Securities.
"Taking into account the issue of mis-invoicing in export data, we believe actual export growth may have improved to 5 to 8 percent year on year in March from around 3 percent in the Jan.-Feb. period," wrote Zhang in a research note.
The GAC's Zheng also pointed out some underlying strength in exports. Exports of labor-intensive products, despite a decline of 6.4 percent in the first two months, registered a 6.8-percent growth in March, reflecting the country's competitiveness in the global trade, he said.
China also saw a rise in exports of cellphones, vehicles and cables in the Jan.-March period.
Zheng said imports declined due to lower commodity prices in the world market, citing a drop in the overall import price index.
The index stood at 95 in the first quarter, indicating a 5-percent drop in the prices of imports over a year ago. Meanwhile, the index for overall import volume stood at 104, meaning an increase of 4 percent in the amount of imports.
Although China is faced with downside economic pressure, its demand for commodities from the global market kept stable, Zheng noted.
He predicted that China's exports will see moderate growth this year, helped by recovery in the global economy, China's reform initiatives and the country's opening-up efforts.
Despite more competition from neighboring countries and regions and trade frictions with major trade partners, it is very likely that China can achieve its trade growth target of 7.5 percent this year, said Zheng.
Chinese Premier Li Keqiang on Thursday expressed confidence that the country can keep its economy functioning within the proper range.
"With all the principles established and policy options at our disposal, we can handle all possible risks and challenges. China's development has strong resilience," said Li at the opening ceremony of the Boao Forum for Asia (BFA) annual conference 2014.
"We will not resort to short-term stimulus policies just because of temporary economic fluctuations and we will pay more attention to sound development in the medium and long run," according to the premier.
Li last week chaired a State Council meeting where growth-supportive steps were announced including cutting tax for small businesses, facilitating shanty-town renovation and speeding up railway construction.
Rather than being seen as stimulus policies, it is believed that these fine-tuning measures will stabilize growth by enhancing economic efficiency while avoiding future financial troubles.
HSBC Chief China Economist Qu Hongbin said the policy package, combined with implementation of reform measures such as lower entry barriers for private investment and abolishing more unnecessary administrative approvals, could provide a cushion for China's economic growth as well as import demand.
Zhang Zhiwei also said there is scope for the government to stay the policy course and not announce new easing measures in April as it waits to see how the economy responds to the measures announced in recent weeks.
Xinhua Insight: China's exports down 6.6 pct in March - Xinhua | English.news.cn
the first one, the coming collapse of China. Vietnam export outperforms China.
And where is the majority of the exports going to ?
karan.1970
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Its surprising when people still think its worthwhile to predict the failure of Chinese economy.. Meh...
shuttler
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Ankai Bus Passes U.S "Acceleration Control System" Test
2014-04-03
Author： Source：China Buses Review, China Buses Guide,-www.chinabuses.org
Credit：chinabus.info
HFF6120K03D
HFF6121K03D
HFF6121K40D
HFF6110GS-1 Double Deck City Tourism Bus
HFF6180G02D
HFF6181G02
HFF6120LK88D
HFF5120XYL medical vehicle
all the above photo credits unless stated and more info
@安凯汽车Ankai here
Summarize：April 2, 2014 from Ankai news, Ankai once again double-decker bus hit the U.S. market, and get through FMVSS571.124 "acceleration control system" test project. Ankai become the first test of China by the bus manufacturers, Ankai excellent safety performance has been verified again and is continuing to develop the U.S. market has laid a solid foundation.
www.chinabuses.org: April 2, 2014 from Ankai news, Ankai once again double-decker bus hit the U.S. market, and get through FMVSS571.124 "acceleration control system" test project. Ankai become the first test of China by the bus manufacturers, Ankai excellent safety performance has been verified again and is continuing to develop the U.S. market has laid a solid foundation.
From 2009 onwards, Ankai products to enter the U.S. market, and gradually gain a firm foothold in the U.S. market. In 2010, Kai luxury double-decker tour buses quantities exported to the U.S., bicycle worth more than 2 million yuan. Currently Kai double-decker tour bus in Los Angeles, San Francisco, Las Vegas, Washington, Miami and other U.S. cities batch operations, to become a unique local landscape, has become China's passenger car market in the international high-end practitioner.
The exports to the U.S. model is Kai HFF6110GS01D double-decker tour bus, which is a mature export products, so the batch to complete various export certification and passed the U.S. customer acceptance, in order to further validate the safety performance of vehicles , to meet the more demanding requirements of high-end market, Ankai also added more detailed vehicle safety testing an experimental project called FMVSS571.124 "speed control system" tests conducted. The test requires accelerating system is guaranteed in any case quickly restored to a non-working state, which is in the country for the first time, before there is no one Chinese bus manufacturers conducted the certification, which Kai is a challenge and an opportunity.
Kai in 2008 by the U.S. DOT certification, then continue with Ankai exported to countries around the world, Ankai have passed the certification WVTA EU countries, Australia ADR certification export certification, and passed the U.S. Environmental Protection Agency EPA13 Euro IV emission standards and emission standards. Ankai currently exports to over 50 countries and regions, and is the first to obtain export credit rating of 3A grade auto companies. In the 2012 London Olympics, Kai London double-decker bus service golden tourist line, the Chinese passenger car to the world of a milestone.
2014-04-03
Author： Source：China Buses Review, China Buses Guide,-www.chinabuses.org
Credit：chinabus.info
HFF6120K03D
HFF6121K03D
HFF6121K40D
HFF6110GS-1 Double Deck City Tourism Bus
HFF6180G02D
HFF6181G02
HFF6120LK88D
HFF5120XYL medical vehicle
all the above photo credits unless stated and more info
@安凯汽车Ankai here
Summarize：April 2, 2014 from Ankai news, Ankai once again double-decker bus hit the U.S. market, and get through FMVSS571.124 "acceleration control system" test project. Ankai become the first test of China by the bus manufacturers, Ankai excellent safety performance has been verified again and is continuing to develop the U.S. market has laid a solid foundation.
www.chinabuses.org: April 2, 2014 from Ankai news, Ankai once again double-decker bus hit the U.S. market, and get through FMVSS571.124 "acceleration control system" test project. Ankai become the first test of China by the bus manufacturers, Ankai excellent safety performance has been verified again and is continuing to develop the U.S. market has laid a solid foundation.
From 2009 onwards, Ankai products to enter the U.S. market, and gradually gain a firm foothold in the U.S. market. In 2010, Kai luxury double-decker tour buses quantities exported to the U.S., bicycle worth more than 2 million yuan. Currently Kai double-decker tour bus in Los Angeles, San Francisco, Las Vegas, Washington, Miami and other U.S. cities batch operations, to become a unique local landscape, has become China's passenger car market in the international high-end practitioner.
The exports to the U.S. model is Kai HFF6110GS01D double-decker tour bus, which is a mature export products, so the batch to complete various export certification and passed the U.S. customer acceptance, in order to further validate the safety performance of vehicles , to meet the more demanding requirements of high-end market, Ankai also added more detailed vehicle safety testing an experimental project called FMVSS571.124 "speed control system" tests conducted. The test requires accelerating system is guaranteed in any case quickly restored to a non-working state, which is in the country for the first time, before there is no one Chinese bus manufacturers conducted the certification, which Kai is a challenge and an opportunity.
Kai in 2008 by the U.S. DOT certification, then continue with Ankai exported to countries around the world, Ankai have passed the certification WVTA EU countries, Australia ADR certification export certification, and passed the U.S. Environmental Protection Agency EPA13 Euro IV emission standards and emission standards. Ankai currently exports to over 50 countries and regions, and is the first to obtain export credit rating of 3A grade auto companies. In the 2012 London Olympics, Kai London double-decker bus service golden tourist line, the Chinese passenger car to the world of a milestone.
Last edited:
shuttler
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China auto sales hit record high
English.news.cn 2014-04-11 22:16:42
BEIJING, April 11 (Xinhua) -- China's automobile sales hit a record high in March, data showed on Friday.
Sales amounted to 2.17 million units in March, up 35.8 percent from 1.6 million units in February, according to the China Association of Automobile Manufacturers (CAAM).
Auto production rose 34.4 percent from a month earlier to 2.2 million units, the CAAM said.
China auto sales hit record high - Xinhua | English.news.cn
Chinese exports are over $2 trillion, and China is the largest exporter. There has been many times before where exports have declined. Most important thing now is retail sales and imports. These are signs of domestic consumption. This will make the Chinese economy more self-sufficient and allow a much hardline foreign policy towards other countries.
Relying on foreign markets for manufactured goods makes the nation vulnerable.
China is the largest consumer of automobiles, smartphones, tablets, PCs, LCD TV, home appliances, consumer electronics, luxury goods, e-commerce, apparel, shoes, etc.
China is the 2nd largest consumer overall. Yes, 2nd in the world. Chinese consumption power is over $3 trillion.
Chinese middle class is over 100 million. Yes, international standard middle class.
Manufactured goods and services are now being consumed by Chinese citizens.
Try harder Turkey, much much harder.
Relying on foreign markets for manufactured goods makes the nation vulnerable.
The writing is on the wall
No, like Chinese members say all the time, they will focus on their national economy because their citizens have buying power
China is the largest consumer of automobiles, smartphones, tablets, PCs, LCD TV, home appliances, consumer electronics, luxury goods, e-commerce, apparel, shoes, etc.
China is the 2nd largest consumer overall. Yes, 2nd in the world. Chinese consumption power is over $3 trillion.
Chinese middle class is over 100 million. Yes, international standard middle class.
Manufactured goods and services are now being consumed by Chinese citizens.
Try harder Turkey, much much harder.
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that is not a good sign. I am very concerned. seems China economic miracle is coming to the end.
soon millions of Chinese will lose their jobs and houses. CCP should brace for protests among their unhappy citizens. revolts may emerge in Chinese cities. hope that won´t be a Chinese spring.
good for the neighbors of China. the bullying may stop
but we will see whether thousands of Chinese refugees come again and knock on Vietnam door as they did after the collapse of the Ming dynasty. I have to tell that hostile Chinese posters against Vietnam here are not qualified for asylum
Nice to day dream isn't it. It as nice as Vietnam becoming the dominant power in Asia.
Do you realise that our military budget alone is bigger than the ENTIRE Vietnamese economy.
Vietnamese economy is a truly laughable $170 BILLION.
Just for comparison, Chinese fiscal revenue is over $2 TRILLION.
Chinese forex reserves are nearly $4 TRILLION.
Chinese sovereign wealth fund has assets over $500 BILLION.
The real Chinese military budget is over $200 BILLION.
Chinese household wealth is above $20 TRILLION.
Asia will be a private playground. There isn't a damn thing you can do about it
We buy in 1 month what most countries buy the entire year.
Just shows the MASSIVE scale of MIGHTY China.
atatwolf
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Chinese statistics is like Greek statistics. Smoke and mirrors. Plus like the Greeks, Chinese are not the smartest out there as they prove again and again. You have to look consumption per capita. Not by country because you will be comparing oranges and apples if you do. There are a billion and more Chinese. If you look per capita Chinese consumption is very very low and majority of your citizens are under poverty line. That is why China can't afford economic setback or collapse. It will mean the end.
shuttler
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that is india, vietcongs, pinoys. ..
grap a map or google to look at the economic scenarioes there TROLL
Yes we still have about 100 million folks who are living in poverty line but we are getting better and we have been advancing much better than other countries which I mentioned
Who is the biggest trader in the world
Which is the second largest economy in the world
Who can build the fastest supercomputer
Which owns the second most in number of supercomputers
Which is the third country to soft land and do research on moon
Who is building the next space station which will remain the only space station after 2020
Which country is on course to complete a GNSS while its regional NSS has been completed
Which country has the most successful rocket launches
Who can launch mid-course missile interceptions
Which country has invented the lightest material on earth
Which country has set new record breaking distances in quantum teleportation
Which countries produce light energy wifi (li-fi)
Which are the leading countries in thorium research and noutrino research
Where is China ranked in Nature's publication index and in scientific journals as a whole
Which country can creat the bending of light in a lab
Which counrty can produce pace makers for the brains
Which countries participate in the world's mapping of human genomes
Which country is the run-away winners of Math Olympiads
Which country shines the brightest in PISA tests 2 times in a row
Which students also among the leading pack of the first OECD PISA assessment of creative problem solving.
Which country has the largest no of Memory Grand Masters in the world
Which country is amongst the best in 3 of the most challenging board games - Weiqi, Chinese Chess, International Chess of the world
Which country is amongst the best special forcies in the world
Which country performs among the top teams in world's military olympics
Which country scored most gold medals in Beijing Olympics and remains as amongst the top contenders in Olympic competitions
Which country is the Kingdom of badminton, platform diving, table tennis ; among the leaders in gymnastics, weight lifting, shooting, archery ..
Who has the fastest growing HSR in the world
Who has the second most billionaires in the world
Who is the largest car manufacturer in the world
Which country pulls more people out of poverty than the rest of the world
Who is becoming the biggest spenders in luxury goods
Which countries have most numbers in the top 500 companies
Which brand tops the sales of personal computers in the world
Which country produces some of the most sensational brands of mobile phones in the world
Which country tops the world in production of household appliances
Which country pioneers the construction concept erecting a 30-storey building in 15 days
Which country has the world's most skyscrapers, the longest tunnels, the longest bridges in the world
Which country has currently the largest dam whch provides the largest hydraulic power station, and the largest power producing body ever built, at22,500 MW
Which country has the most power producig facilities in the world
Which is the leading country in producing renewable energy
Which countries are the top movie industries in the world
Which country has the most kids playing pianoes/other musical instruments and basketball/other sports activities in the world?
..... and plenty plenty more!
Just chill out for good TROLL!
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As opposed to Yankee stats and Turk stats?
Per capita consumption is utterly irrelevant in determining consumption power of a nation. Per capita includes middle class population AND poverty stricken population which greatly underestimates the consumption power of mighty China.
China has the largest consumer market for many goods and is the 2nd largest overall consumer market.
China has many poor people but there are extremely wealthy people too that live like kings in China. You have no freaking idea how massive China is. China's population is bigger than the entire western world combined.
China has more US dollar millionaire population than the population of entire countries.
Chinese middle class is over 100 million and growing. That means 100 million people buy everything western consumers are buying.
Chinese household wealth is over $20 TRILLION.
China has another billion Chinese that can add to that middle class population.
You are extremely ignorant about per capita stats.
Many multinationals consider China as their largest or 2nd largest market.
Your thinking is typical of an economic noob. Qatar has extremely high per capita but does Qatar have a bigger consumer market than China? NOPE!
Why?
Because Qatar has a small population of rich people but China has multiple times as many rich people as the entire population of Qatar which makes Chinese consumption power vastly greater than Qatar.
atatwolf
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I don't really have time to educate Chinicites because you don't want to understand or maybe you don't have the capacity to understand.
China is doing a lot of investment yes but that is not connected to consumption. Investment will increase consumption and create jobs but China's population is still dirt poor compared to Europe. Per capita purchasing power in China is similar to purchasing power of a stray dog in Europe. In addition your whole economy is dependent on US and Europe, your enemies.
China HAS to keep up growth rate, without that, their economy will fail and the growth rate for China is already falling like a rock. Most economist say that China, how hard they try will face economic crises because demand for cheap chinese shyte is declining and US is already moving production to third countries.
There is overwhelming poverty of China, where 900 million people have an annual per capita income around the same level as Guatemala, Georgia, Indonesia or Mongolia ($3,000-$3,500 a year), while around 500 million of those have an annual per capita income around the same level as India, Nicaragua, Ghana, Uzbekistan or Nigeria ($1,500-$1,700). China's overall per capita GDP is around the same level as the Dominican Republic, Serbia, Thailand or Jamaica. Stimulating an economy where more than a billion people live in deep poverty is impossible. Economic stimulus makes sense when products can be sold to the public. But the vast majority of Chinese cannot afford the products produced in China, and therefore, stimulus will not increase consumption of those products.
At the end China will face major financial crises. The prediction is that central government will loose control. Southern and eastern China will undermine Beijing to attract investment from Japan. You will loose other regions as well. You can believe in the Chinese miracle but a paper tiger will always be a paper tiger.
China is doing a lot of investment yes but that is not connected to consumption. Investment will increase consumption and create jobs but China's population is still dirt poor compared to Europe. Per capita purchasing power in China is similar to purchasing power of a stray dog in Europe. In addition your whole economy is dependent on US and Europe, your enemies.
China HAS to keep up growth rate, without that, their economy will fail and the growth rate for China is already falling like a rock. Most economist say that China, how hard they try will face economic crises because demand for cheap chinese shyte is declining and US is already moving production to third countries.
There is overwhelming poverty of China, where 900 million people have an annual per capita income around the same level as Guatemala, Georgia, Indonesia or Mongolia ($3,000-$3,500 a year), while around 500 million of those have an annual per capita income around the same level as India, Nicaragua, Ghana, Uzbekistan or Nigeria ($1,500-$1,700). China's overall per capita GDP is around the same level as the Dominican Republic, Serbia, Thailand or Jamaica. Stimulating an economy where more than a billion people live in deep poverty is impossible. Economic stimulus makes sense when products can be sold to the public. But the vast majority of Chinese cannot afford the products produced in China, and therefore, stimulus will not increase consumption of those products.
At the end China will face major financial crises. The prediction is that central government will loose control. Southern and eastern China will undermine Beijing to attract investment from Japan. You will loose other regions as well. You can believe in the Chinese miracle but a paper tiger will always be a paper tiger.
Srinivas
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Property Trust Sales Drop 49% as Vicious Loop Seen: China Credit
Chinese developers raised 49 percent less through trusts in the first quarter as the collapse of Zhejiang Xingrun Real Estate Co. highlighted default risks.
Issuance of property-related trusts, which target wealthy investors, slid to 50.7 billion yuan ($8.16 billion) from 99.7 billion yuan in the fourth quarter, data compiled by Use Trust show. The yieldon AA rated five-year bonds has climbed 175 basis points in the past year to 7.23 percent, according to Chinabond. That compares with 2.74 percent on corporate securities globally, Bank of America Merrill Lynch indexes show.
“The banking system and the shadow banking system are becoming concerned about exposure,” David Cui, China strategist at Bank of America said in an interview yesterday. “Once people refuse to provide credit to developers, their balance sheets will be under pressure, forcing them to cut prices. Once enough of them cut prices, fewer people would buy because most people buy property only when they think the price is going up. If this persists, it will turn into a vicious loop.”
The collapse of Xingrun, a builder in a city south of Shanghai, with 3.5 billion yuan in liabilities last month is adding to concerns as developers grapple with trust repayments equivalent to the size of Puerto Rico’s economy this year. Agricultural Bank of China Ltd., the nation’s third-largest lender, last week alerted its branches about risks from property lending, according to two people familiar with the matter.
Value Falls
New property trust offerings accounted for 30 percent of total trust sales in the first quarter, down from 33 percent in the last three months last year, according to data compiled by Use Trust. Figures from the research firm are for collective products only, which are sold to more than one investor.
The value of homes in China sold in January and February fell 5 percent to 598.5 billion yuan from the same two months a year earlier, the statistics bureau said last month. It will become more difficult for builders to obtain financing in 2014, according to 26 economists and analysts surveyed by Bloomberg from March 24 to 31.
This year will probably be the most challenging for Chinese property companies since the short-term shock between 2008 and 2009 after the global financial crisis, according to Bank of America’s Cui. “There is high probability that some property trust products will default this year.”
More Failures
After Xingrun’s failure, China’s economic planning body expanded an annual property survey that helps shape policies to more than 300 cities. The National Development and Reform Commission ordered the survey be expanded to cities at the prefecture level and above, two government officials who asked not to be identified because they weren’t authorized to speak publicly said last month.
Companies with other kinds of building projects are also facing repayment concerns. A unit ofChina Sports Industry Group Co. (600158) failed to repay 144 million yuan of principal on a 600 million yuan trust loan for a sports center development, according to a statement from the company to Shanghai’s stock exchange dated April 4.
Speculation has increased that defaults may spread as the world’s second-largest economy cools. Policy makers have set a 7.5 percent growth target for 2014, which would be the slowest since 1990. Credit-default swap contracts insuring the nation’s debt against non-payment have climbed 5 basis points this year to 85 basis points, prices from data provider CMA show.
Bubble Risk
Premier Li Keqiang said the government will regulate the housing market “differently in different cities” to take into account local conditions. Jia Kang, director of the Ministry of Finance’s fiscal-science research institute, said on April 9 that China’s property bubble is “not big.”
While the decline in credit to the property sector will intensify the industry’s negative trend, only a few smaller developers may default on borrowings this year, according to Yao Wei, Hong Kong-based China economist at Societe Generale SA.
“Bubbles in some areas may be squeezed out,” Yao said yesterday. “There is low probability that it will lead to panic or systematic risks.”
Benchmark borrowing costs have risen with the yield on China’s 10-year sovereign note up 100 basis points over the past year to 4.46 percent. The premium investors demand to hold AA-rated similar-maturity corporate securities has climbed 7 basis points over the same period to 390 basis points.
Shadow Banking
“While the government is trying to curb shadow banking and investors are worried about credit risks of property companies, shadow-banking credit to the property sector will continue to shrink,” said Li Ning, a bond analyst in Shanghai at Haitong Securities Co., the nation’s second-biggest brokerage. “Property companies’ demand for capital is still strong even as borrowing costs rise.”
Mining and property trusts are among the products with the highest default risks, Li added.
Outstanding property trust products, including collective and single, totaled 1.03 trillion yuan as of the end of last year, accounting for 10 percent of all types of trusts, according to data posted on the website of China Trustee Association.
China is cracking down on its shadow-banking industry, where finance companies lend with less transparency, as inefficient allocation of capital slows economic growth and threatens social unrest.
Unless the government intervenes, both shadow banks and official lenders will provide less financial support to property companies, according to Bank of America’s Cui. At the moment, there is no strong sign that the central government will come out to support the real estate industry, he said.
“Both the economy and the financial system are relying too much on the property sector,” he said. “This is a systematic problem.”
Property Trust Sales Drop 49% as Vicious Loop Seen: China Credit - Bloomberg
UPDATE 2-Desperate for credit, China importers default on soy cargoes
* Importers default on at least 10 soy shipments -sources
* Buyers face problems getting credit for cargoes
* Processors losing $80-$100/T crushing beans
* Raises spectre of more cargo defaults (Adds comment, detail)
By Naveen Thukral and Niu Shuping
SINGAPORE/BEIJING, April 10 (Reuters) - Chinese importers have defaulted on at least 500,000 tonnes of U.S. and Brazilian soybean cargoes worth around $300 million, the biggest in a decade, as buyers struggle to get credit amid losses in processing beans.
Three companies in the eastern province of Shandong had defaulted on payments for shipments as they were unable to open letters of credit with banks, trade sources said on Thursday.
A string of defaults on loans, bonds and shadow banking products in recent weeks has highlighted rising credit risks in China, partly fuelled by signs the economy is slowing.
Commodity firms, along with semiconductor and software companies, are among the most at risk of credit defaults, a Reuters analysis of more than 2,600 Chinese companies showed.
Up against the cooling economy and signs that authorities will not step in every time a loan goes bad, Chinese banks are becoming more hard-nosed and selective about whom they lend to.
"There are five to six (panamax) cargoes which are unable to be unloaded at ports because buyers cannot open LCs (letters of credit) and there are no LCs for an additional 5-6 cargoes floating on the sea," one Beijing-based source said. Each panamax cargo is for 50,000 to 60,000 tonnes.
Defaults by buyers in China, which imports 60 percent of the soybeans traded in the world, would likely cap a rally in global prices as they coincide with bumper supplies from Brazil and Argentina hitting the market.
Chicago Board of Trade front-month soybeans edged lower on Thursday after climbing to their highest since July in the last session when the U.S. Department of Agriculture cut its forecast for stocks remaining at the end of the crop year.
"The reality is that the world is reliant on Chinese imports of soybeans to maintain this price strength," said Luke Mathews, commodities strategist at Commonwealth Bank of Australia in Sydney.
"It is putting a question mark on the sustainability of these prices."
The default on 500,000 tonnes of soybeans is the biggest since 2004, when buyers walked away from an estimated 30 contracts, resulting in a loss of close to $700 million, traders said.
Industry sources said some of the companies defaulting have been using soybean imports to secure cheap financing, with interest rates on letters of credit as low as 2 percent and allowing delayed payment of several months.
Having imported large amounts, some of them even sell the oilseed at a loss, as a way to liquidate their stocks and plough cash into more profitable businesses.
Fearing a wave of defaults as China's economy cools after decades of rapid growth, regulators in the past two years told banks to cut off financing to sectors plagued by excess capacity such as steel and cement.
Exporters, in a bid to gain a foothold in the lucrative Chinese market, sometimes ship cargoes when importers do not have confirmed letters of credit, trusting buyers will honour their commitment. The practice was briefly abandoned after the wave of defaults in 2004 but slowly resumed.
INDUSTRY EARTHQUAKE?
With negative processing margins and tightening credit, sources said there could be more defaults on cargoes of soybeans, crushed to make cooking oil and animal feed ingredient soymeal.
"More ships are coming in, but given the big losses banks are not risking opening LCs for those trading firms," said a senior company executive whose firm has faced rejections in getting letters of credit from banks. "It is really an earthquake for the industry."
Crushers are losing 500-600 yuan ($81-$97) for processing a tonne of soybeans, compared with a 600 yuan profit in the fourth quarter of last year during peak consumption and when some shipments were delayed.
The fat margin in the fourth quarter prompted China to purchase 27.7 million tonnes of U.S soy so far in the current marketing year to August, 2014. China bought a total of 21 million tonnes of U.S. soybeans the year before.
China imported 15.35 million tonnes of the oilseed in the first quarter, up 33.5 percent on a year earlier, according to official Customs data issued on Thursday.
"Crushers are making big losses while downstream product meal is not selling very well," said an official at a body, which oversees soybean imports under the commerce ministry.
Imports could fall below 15 million tonnes in the third quarter from 18.25 million in the same period last year, traders and industry officials said.
"If you crush beans in China today you lose $80-$100 a tonne," said a Singapore-based senior executive with a global trading company that has processing facilities in China.
"This is really discouraging people from buying beans and we expect the real impact will be felt in the third quarter."
Demand for soymeal has been hit by outbreaks of bird flu, cutting appetite by as much as 20 to 30 percent in the February-March period, analysts said. Pig farmers have also reduced purchases as they trim herds due to oversupplied pork markets. (Editing by Joseph Radford and Amran Abocar)
Chinese developers raised 49 percent less through trusts in the first quarter as the collapse of Zhejiang Xingrun Real Estate Co. highlighted default risks.
Issuance of property-related trusts, which target wealthy investors, slid to 50.7 billion yuan ($8.16 billion) from 99.7 billion yuan in the fourth quarter, data compiled by Use Trust show. The yieldon AA rated five-year bonds has climbed 175 basis points in the past year to 7.23 percent, according to Chinabond. That compares with 2.74 percent on corporate securities globally, Bank of America Merrill Lynch indexes show.
“The banking system and the shadow banking system are becoming concerned about exposure,” David Cui, China strategist at Bank of America said in an interview yesterday. “Once people refuse to provide credit to developers, their balance sheets will be under pressure, forcing them to cut prices. Once enough of them cut prices, fewer people would buy because most people buy property only when they think the price is going up. If this persists, it will turn into a vicious loop.”
The collapse of Xingrun, a builder in a city south of Shanghai, with 3.5 billion yuan in liabilities last month is adding to concerns as developers grapple with trust repayments equivalent to the size of Puerto Rico’s economy this year. Agricultural Bank of China Ltd., the nation’s third-largest lender, last week alerted its branches about risks from property lending, according to two people familiar with the matter.
Value Falls
New property trust offerings accounted for 30 percent of total trust sales in the first quarter, down from 33 percent in the last three months last year, according to data compiled by Use Trust. Figures from the research firm are for collective products only, which are sold to more than one investor.
The value of homes in China sold in January and February fell 5 percent to 598.5 billion yuan from the same two months a year earlier, the statistics bureau said last month. It will become more difficult for builders to obtain financing in 2014, according to 26 economists and analysts surveyed by Bloomberg from March 24 to 31.
This year will probably be the most challenging for Chinese property companies since the short-term shock between 2008 and 2009 after the global financial crisis, according to Bank of America’s Cui. “There is high probability that some property trust products will default this year.”
More Failures
After Xingrun’s failure, China’s economic planning body expanded an annual property survey that helps shape policies to more than 300 cities. The National Development and Reform Commission ordered the survey be expanded to cities at the prefecture level and above, two government officials who asked not to be identified because they weren’t authorized to speak publicly said last month.
Companies with other kinds of building projects are also facing repayment concerns. A unit ofChina Sports Industry Group Co. (600158) failed to repay 144 million yuan of principal on a 600 million yuan trust loan for a sports center development, according to a statement from the company to Shanghai’s stock exchange dated April 4.
Speculation has increased that defaults may spread as the world’s second-largest economy cools. Policy makers have set a 7.5 percent growth target for 2014, which would be the slowest since 1990. Credit-default swap contracts insuring the nation’s debt against non-payment have climbed 5 basis points this year to 85 basis points, prices from data provider CMA show.
Bubble Risk
Premier Li Keqiang said the government will regulate the housing market “differently in different cities” to take into account local conditions. Jia Kang, director of the Ministry of Finance’s fiscal-science research institute, said on April 9 that China’s property bubble is “not big.”
While the decline in credit to the property sector will intensify the industry’s negative trend, only a few smaller developers may default on borrowings this year, according to Yao Wei, Hong Kong-based China economist at Societe Generale SA.
“Bubbles in some areas may be squeezed out,” Yao said yesterday. “There is low probability that it will lead to panic or systematic risks.”
Benchmark borrowing costs have risen with the yield on China’s 10-year sovereign note up 100 basis points over the past year to 4.46 percent. The premium investors demand to hold AA-rated similar-maturity corporate securities has climbed 7 basis points over the same period to 390 basis points.
Shadow Banking
“While the government is trying to curb shadow banking and investors are worried about credit risks of property companies, shadow-banking credit to the property sector will continue to shrink,” said Li Ning, a bond analyst in Shanghai at Haitong Securities Co., the nation’s second-biggest brokerage. “Property companies’ demand for capital is still strong even as borrowing costs rise.”
Mining and property trusts are among the products with the highest default risks, Li added.
Outstanding property trust products, including collective and single, totaled 1.03 trillion yuan as of the end of last year, accounting for 10 percent of all types of trusts, according to data posted on the website of China Trustee Association.
China is cracking down on its shadow-banking industry, where finance companies lend with less transparency, as inefficient allocation of capital slows economic growth and threatens social unrest.
Unless the government intervenes, both shadow banks and official lenders will provide less financial support to property companies, according to Bank of America’s Cui. At the moment, there is no strong sign that the central government will come out to support the real estate industry, he said.
“Both the economy and the financial system are relying too much on the property sector,” he said. “This is a systematic problem.”
Property Trust Sales Drop 49% as Vicious Loop Seen: China Credit - Bloomberg
UPDATE 2-Desperate for credit, China importers default on soy cargoes
* Importers default on at least 10 soy shipments -sources
* Buyers face problems getting credit for cargoes
* Processors losing $80-$100/T crushing beans
* Raises spectre of more cargo defaults (Adds comment, detail)
By Naveen Thukral and Niu Shuping
SINGAPORE/BEIJING, April 10 (Reuters) - Chinese importers have defaulted on at least 500,000 tonnes of U.S. and Brazilian soybean cargoes worth around $300 million, the biggest in a decade, as buyers struggle to get credit amid losses in processing beans.
Three companies in the eastern province of Shandong had defaulted on payments for shipments as they were unable to open letters of credit with banks, trade sources said on Thursday.
A string of defaults on loans, bonds and shadow banking products in recent weeks has highlighted rising credit risks in China, partly fuelled by signs the economy is slowing.
Commodity firms, along with semiconductor and software companies, are among the most at risk of credit defaults, a Reuters analysis of more than 2,600 Chinese companies showed.
Up against the cooling economy and signs that authorities will not step in every time a loan goes bad, Chinese banks are becoming more hard-nosed and selective about whom they lend to.
"There are five to six (panamax) cargoes which are unable to be unloaded at ports because buyers cannot open LCs (letters of credit) and there are no LCs for an additional 5-6 cargoes floating on the sea," one Beijing-based source said. Each panamax cargo is for 50,000 to 60,000 tonnes.
Defaults by buyers in China, which imports 60 percent of the soybeans traded in the world, would likely cap a rally in global prices as they coincide with bumper supplies from Brazil and Argentina hitting the market.
Chicago Board of Trade front-month soybeans edged lower on Thursday after climbing to their highest since July in the last session when the U.S. Department of Agriculture cut its forecast for stocks remaining at the end of the crop year.
"The reality is that the world is reliant on Chinese imports of soybeans to maintain this price strength," said Luke Mathews, commodities strategist at Commonwealth Bank of Australia in Sydney.
"It is putting a question mark on the sustainability of these prices."
The default on 500,000 tonnes of soybeans is the biggest since 2004, when buyers walked away from an estimated 30 contracts, resulting in a loss of close to $700 million, traders said.
Industry sources said some of the companies defaulting have been using soybean imports to secure cheap financing, with interest rates on letters of credit as low as 2 percent and allowing delayed payment of several months.
Having imported large amounts, some of them even sell the oilseed at a loss, as a way to liquidate their stocks and plough cash into more profitable businesses.
Fearing a wave of defaults as China's economy cools after decades of rapid growth, regulators in the past two years told banks to cut off financing to sectors plagued by excess capacity such as steel and cement.
Exporters, in a bid to gain a foothold in the lucrative Chinese market, sometimes ship cargoes when importers do not have confirmed letters of credit, trusting buyers will honour their commitment. The practice was briefly abandoned after the wave of defaults in 2004 but slowly resumed.
INDUSTRY EARTHQUAKE?
With negative processing margins and tightening credit, sources said there could be more defaults on cargoes of soybeans, crushed to make cooking oil and animal feed ingredient soymeal.
"More ships are coming in, but given the big losses banks are not risking opening LCs for those trading firms," said a senior company executive whose firm has faced rejections in getting letters of credit from banks. "It is really an earthquake for the industry."
Crushers are losing 500-600 yuan ($81-$97) for processing a tonne of soybeans, compared with a 600 yuan profit in the fourth quarter of last year during peak consumption and when some shipments were delayed.
The fat margin in the fourth quarter prompted China to purchase 27.7 million tonnes of U.S soy so far in the current marketing year to August, 2014. China bought a total of 21 million tonnes of U.S. soybeans the year before.
China imported 15.35 million tonnes of the oilseed in the first quarter, up 33.5 percent on a year earlier, according to official Customs data issued on Thursday.
"Crushers are making big losses while downstream product meal is not selling very well," said an official at a body, which oversees soybean imports under the commerce ministry.
Imports could fall below 15 million tonnes in the third quarter from 18.25 million in the same period last year, traders and industry officials said.
"If you crush beans in China today you lose $80-$100 a tonne," said a Singapore-based senior executive with a global trading company that has processing facilities in China.
"This is really discouraging people from buying beans and we expect the real impact will be felt in the third quarter."
Demand for soymeal has been hit by outbreaks of bird flu, cutting appetite by as much as 20 to 30 percent in the February-March period, analysts said. Pig farmers have also reduced purchases as they trim herds due to oversupplied pork markets. (Editing by Joseph Radford and Amran Abocar)
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