Faced with many difficulties, China's economy may decelerate sharply

[xizhimen]

What caused China's economy to grow only 4.9% in the third quarter?

Lol, 4.9% was only 0.1% lower than what expected, which was 5%.

What caused US economy to grow only 2% in the third quarter? By the way.

 

[xizhimen]

Điều gì khiến kinh tế Trung Quốc chỉ tăng 4,9% trong quý 3?

Tổng sản phẩm trong nước (GDP) của Trung Quốc tăng trưởng 4,9% trong quý 3 vừa qua, do sản lượng công nghiệp tăng yếu hơn dự kiến và một số nguyên nhân khác. Mức tăng trưởng này của nền kinh tế lớn thứ nhì thế giới khiến giới quan sát thất vọng...

vneconomy.vn

What is this V economy? a vietnamese news paper?

Did it explain why Vietnamese GDP shrank by 6.7% in the third quarter?

Vietnam's GDP shrinks 6.17% in Q3, hurt by pandemic lockdowns

With negative growth, annual target of 6.5% looks out of reach

asia.nikkei.com

Vietnamese GDP is smaller than Chinese cities like Shanghai, Beijing, Shenzhen, Hong kong, Guangzhou, Chongqing..., my city, Beijing, grew 10.7% in the third quarter, I guess Vietnam intends to beat all individual Chinese cities in GDP, and turns to challenge poor Chinese provinces, but you can not achieve these goals by shrinking your economy. 6.7% shrinking!! My goodness, this is a lot!

 

[Viva_vietnamm]

Vietnamese GDP is smaller than Chinese cities like Shanghai, Beijing, Shenzhen, Hong kong, Guangzhou, Chongqing..., my city, Beijing, grew 10.7% in the third quarter, I guess Vietnam intends to beat all individual Chinese cities in GDP, and turns to challenge poor Chinese provinces, but you can not achieve these goals by shrinking your economy. 6.7% shrinking!! My goodness, this is a lot!

Lol, 4.9% was only 0.1% lower than what expected, which was 5%.

What caused US economy to grow only 2% in the third quarter? By the way.

CN has 1,4 billion ppl but having Zero core technology. Your usless cities only do useless things (making phone without chip, car without chips but in too high labor cost) thats why CN economy keep falling .

Only companies who sell their products in CN (Iphone, BMW, Tesla) wanna open factories in CN, despite high labor cost, bcs they wanna suck CN's money dry.

 

[xizhimen]

CN has 1,4 billion ppl but having Zero core technology. Your usless cities only do useless things (making phone without chip, car without chips but in too high labor cost) thats why CN economy keep falling .

Lost it again? Lol.., China has zero technology, Vietnamese have all the technology, China's economy is collapsing every day, while Vietnam's goes up everyday, by shrinking 6.7% ....

 

[Viva_vietnamm]

Reasons to not believe the economic data that China publishes
Comment Duc Duy • 15:07, 10/30/21


China has always had two "different sets of books" about the country's economic situation. One set was created from fake data, to match the political line of the ruling Communist Party. This set of books is often publicized nationally and internationally. The other contains real data that can only be accessed by Party officials, or must be purchased on the black market.

That's according to Christopher Balding, who taught economics at Peking University's Business School in Shenzhen for nine years. In 2018, Mr. Balding was expelled from the school after expressing concerns about Beijing's censorship practices. After that, he left China under the pretext of protecting his own safety.



Balding, who now lives in the US, told EpochTV's "American Thought Leaders" program: While most people know about the top-down censorship system. To tighten the people's right to freedom of expression and access to information, few people realize the censorship within the Chinese Communist Party (CCP) bureaucracy itself."

“Besides, there is a great deal of censorship… in terms of how information is conveyed from bottom to top. No one is going to say to their leader, 'Report boss, we had a terrible year'.

According to Balding, “there are completely different sets of books” on economic data in China.

China's local authorities have even admitted so many times in recent years. In January 2017, the Liaoning provincial government admitted to exaggerating the province's economic data from 2011-14. A year later, a city in Inner Mongolia revised its 2017 economic data after redundancy. admitted that they had added “fake data”.

Mr. Balding told a story from when he was living in China. An official from the country told him that another official working at a local branch of the National Bureau of Statistics was arrested for selling real data on the economy.

Mr. Balding asked if the other person had been charged with corruption or crimes related to national security. The official who told him the story replied, "Oh, national security, we can't make that public."

"When someone confirmed there was real data and fake data, I was surprised," Balding said.

China's dual-data system has created a "thriving black market data market".

However, this game of data fraud is getting harder and harder to do. In particular, the Beijing regime has a hard time matching 'fake data' with 'actual numbers' that come from sources that are hard to fake, such as air quality and light intensity.

Mr Balding said: “Collating industrial activity figures in an area with air quality data can reveal truths. The economic data of a province with a large-scale steel production facility can be cross-checked by analyzing the air quality of that province. If that province has good air quality, it is more likely that steel producers have burned less coal. Therefore, it is hard to believe that this region has achieved high economic growth.



A surveillance camera near the China Evergrande building in Shanghai on September 24, 2021. (Photo: Aly Song/Reuters)

Evergrande

While there is much speculation about whether or not Beijing rescues struggling property developer Evergrande, Mr. Balding believes the answer is quite simple.

The CCP “can totally solve this problem very easily” because Evergrande’s $300 billion debt is a fraction of the country’s gross domestic product (GDP).

What's important here, though, is how the real estate giant's crisis will spread to other sectors of the Chinese economy, such as retail and banking.

The real issue, according to Balding, is whether Beijing can work it out properly so that people don't lose faith in other areas of the Chinese economy, whether it's real estate, the aluminum industry, the cement industry. bamboo shoots, or banks.

On October 24, Evergrande announced that it has resumed construction activities in more than 10 real estate projects in 6 different cities in China. Even so, the company did not disclose the number of projects that have been suspended among its approximately 1,300 projects across the country.

Mr. Balding pointed to potential troubles at Ping An Bank, which has its headquarters in the southern Chinese city of Shenzhen.

According to Reuters, Ping An Bank's earnings report released on October 20 showed that the bank's special mention loans increased by 37.3% in the third quarter of 2021 compared to the third quarter of 2021. with the end of 2020. The cause is said to come from the liquidity difficulties of Shenzhen Baoneng Group, a real estate and financial services business.

Mr Balding added: “People have confidence in banks because they can go there and withdraw their money. If that trust is lost, even if the bank still has a good balance sheet, the bank will collapse because everyone wants to get all their money back.”

However, according to the economist, most of the trouble stemming from the Evergrande crisis will be confined to China.

“There's not a lot of money flowing from outside China into real estate and into Chinese aluminum companies. However, sectors or companies that are directly involved abroad will be greatly affected.”


These companies include foreign ore producers, as Chinese steelmakers will reduce their purchases of raw materials.

Empty apartment developments stand in the city of Ordos, Inner Mongolia on September 12, 2011. The city which is commonly referred to as a "Ghost Town" due to it's lack of people, is being built to house 1.5 million inhabitants and has been dubbed as the "Dubai of China" by locals. AFP PHOTO/Mark RALSTON (Photo credit should read MARK RALSTON/AFP via Getty Images)


Uninhabited real estate projects in Ordos city, Inner Mongolia, September 12, 2011. (Image: Mark Ralston/AFP via Getty Images)

China's Economy

According to Mr. Balding, Evergrande is not the only case in China where growth is based on debt and is being hit on his back by his stick. This is a problem all over China.

China is a “highly indebted country”, “Chinese households are more indebted than US households”.

“If you compare Chinese household debt with Russia or Mexico, compared to per capita income, Chinese households are more indebted than households in other countries,” notes. that most of this debt is tied to real estate, Mr. Balding said.

According to the South China Morning Post, household debt in China as a percentage of after-tax income hit a record high of 130.9% at the end of 2020, and stood at 61.3% of GDP in the first quarter of 2021.

"An economy can't run with the level of debt we're seeing," Balding said.

Such a high level of debt would put a “huge constraint” on future spending, reducing consumption of luxury goods, or international education services, among other things.

While many have argued that the Evergrande crisis and other trends are pushing China's economy into jeopardy, any assessment of the likelihood of a financial crisis in China, according to Mr. The country must also take into account its political system.

‘When will China face a financial crisis? - it's more of a "political question" than an "economic or financial question".

Authoritarian regimes like the CCP cannot allow such economic turmoil.


“If a financial crisis occurs in authoritarian countries… that will not bring good results for the leadership,” Mr. Balding said. Therefore, this is a matter of the "survival" of the communist regime. Chinese leader Xi Jinping will likely do whatever is necessary to resolve the crisis.

According to Mr. Balding, “There is no check that is too large that he does not sign. No bailout will be too big for him to come up with," because Xi "didn't want to lead China's downfall."

Chuyên gia: Lý do để không tin vào số liệu kinh tế mà Trung Quốc công bố

Trung Quốc luôn có 2 “bộ sổ sách khác nhau” về tình hình kinh tế đất nước. Một bộ được tạo ra từ dữ liệu giả, sao cho phù hợp với đường lối chính trị của Đảng Cộng sản cầm quyền. Bộ sổ sách ...

www.ntdvn.com

 

[xizhimen]

Reasons to not believe the economic data that China publishes
Comment Duc Duy • 15:07, 10/30/21


China has always had two "different sets of books" about the country's economic situation. One set was created from fake data, to match the political line of the ruling Communist Party. This set of books is often publicized nationally and internationally. The other contains real data that can only be accessed by Party officials, or must be purchased on the black market.

That's according to Christopher Balding, who taught economics at Peking University's Business School in Shenzhen for nine years. In 2018, Mr. Balding was expelled from the school after expressing concerns about Beijing's censorship practices. After that, he left China under the pretext of protecting his own safety.



Balding, who now lives in the US, told EpochTV's "American Thought Leaders" program: While most people know about the top-down censorship system. To tighten the people's right to freedom of expression and access to information, few people realize the censorship within the Chinese Communist Party (CCP) bureaucracy itself."

“Besides, there is a great deal of censorship… in terms of how information is conveyed from bottom to top. No one is going to say to their leader, 'Report boss, we had a terrible year'.

According to Balding, “there are completely different sets of books” on economic data in China.

China's local authorities have even admitted so many times in recent years. In January 2017, the Liaoning provincial government admitted to exaggerating the province's economic data from 2011-14. A year later, a city in Inner Mongolia revised its 2017 economic data after redundancy. admitted that they had added “fake data”.

Mr. Balding told a story from when he was living in China. An official from the country told him that another official working at a local branch of the National Bureau of Statistics was arrested for selling real data on the economy.

Mr. Balding asked if the other person had been charged with corruption or crimes related to national security. The official who told him the story replied, "Oh, national security, we can't make that public."

"When someone confirmed there was real data and fake data, I was surprised," Balding said.

China's dual-data system has created a "thriving black market data market".

However, this game of data fraud is getting harder and harder to do. In particular, the Beijing regime has a hard time matching 'fake data' with 'actual numbers' that come from sources that are hard to fake, such as air quality and light intensity.

Mr Balding said: “Collating industrial activity figures in an area with air quality data can reveal truths. The economic data of a province with a large-scale steel production facility can be cross-checked by analyzing the air quality of that province. If that province has good air quality, it is more likely that steel producers have burned less coal. Therefore, it is hard to believe that this region has achieved high economic growth.



A surveillance camera near the China Evergrande building in Shanghai on September 24, 2021. (Photo: Aly Song/Reuters)

Evergrande

While there is much speculation about whether or not Beijing rescues struggling property developer Evergrande, Mr. Balding believes the answer is quite simple.

The CCP “can totally solve this problem very easily” because Evergrande’s $300 billion debt is a fraction of the country’s gross domestic product (GDP).

What's important here, though, is how the real estate giant's crisis will spread to other sectors of the Chinese economy, such as retail and banking.

The real issue, according to Balding, is whether Beijing can work it out properly so that people don't lose faith in other areas of the Chinese economy, whether it's real estate, the aluminum industry, the cement industry. bamboo shoots, or banks.

On October 24, Evergrande announced that it has resumed construction activities in more than 10 real estate projects in 6 different cities in China. Even so, the company did not disclose the number of projects that have been suspended among its approximately 1,300 projects across the country.

Mr. Balding pointed to potential troubles at Ping An Bank, which has its headquarters in the southern Chinese city of Shenzhen.

According to Reuters, Ping An Bank's earnings report released on October 20 showed that the bank's special mention loans increased by 37.3% in the third quarter of 2021 compared to the third quarter of 2021. with the end of 2020. The cause is said to come from the liquidity difficulties of Shenzhen Baoneng Group, a real estate and financial services business.

Mr Balding added: “People have confidence in banks because they can go there and withdraw their money. If that trust is lost, even if the bank still has a good balance sheet, the bank will collapse because everyone wants to get all their money back.”

However, according to the economist, most of the trouble stemming from the Evergrande crisis will be confined to China.

“There's not a lot of money flowing from outside China into real estate and into Chinese aluminum companies. However, sectors or companies that are directly involved abroad will be greatly affected.”


These companies include foreign ore producers, as Chinese steelmakers will reduce their purchases of raw materials.

Empty apartment developments stand in the city of Ordos, Inner Mongolia on September 12, 2011. The city which is commonly referred to as a "Ghost Town" due to it's lack of people, is being built to house 1.5 million inhabitants and has been dubbed as the "Dubai of China" by locals. AFP PHOTO/Mark RALSTON (Photo credit should read MARK RALSTON/AFP via Getty Images)


Uninhabited real estate projects in Ordos city, Inner Mongolia, September 12, 2011. (Image: Mark Ralston/AFP via Getty Images)

China's Economy

According to Mr. Balding, Evergrande is not the only case in China where growth is based on debt and is being hit on his back by his stick. This is a problem all over China.

China is a “highly indebted country”, “Chinese households are more indebted than US households”.

“If you compare Chinese household debt with Russia or Mexico, compared to per capita income, Chinese households are more indebted than households in other countries,” notes. that most of this debt is tied to real estate, Mr. Balding said.

According to the South China Morning Post, household debt in China as a percentage of after-tax income hit a record high of 130.9% at the end of 2020, and stood at 61.3% of GDP in the first quarter of 2021.

"An economy can't run with the level of debt we're seeing," Balding said.

Such a high level of debt would put a “huge constraint” on future spending, reducing consumption of luxury goods, or international education services, among other things.

While many have argued that the Evergrande crisis and other trends are pushing China's economy into jeopardy, any assessment of the likelihood of a financial crisis in China, according to Mr. The country must also take into account its political system.

‘When will China face a financial crisis? - it's more of a "political question" than an "economic or financial question".

Authoritarian regimes like the CCP cannot allow such economic turmoil.


“If a financial crisis occurs in authoritarian countries… that will not bring good results for the leadership,” Mr. Balding said. Therefore, this is a matter of the "survival" of the communist regime. Chinese leader Xi Jinping will likely do whatever is necessary to resolve the crisis.

According to Mr. Balding, “There is no check that is too large that he does not sign. No bailout will be too big for him to come up with," because Xi "didn't want to lead China's downfall."

Chuyên gia: Lý do để không tin vào số liệu kinh tế mà Trung Quốc công bố

Trung Quốc luôn có 2 “bộ sổ sách khác nhau” về tình hình kinh tế đất nước. Một bộ được tạo ra từ dữ liệu giả, sao cho phù hợp với đường lối chính trị của Đảng Cộng sản cầm quyền. Bộ sổ sách ...

www.ntdvn.com

It's funny that you posted Chinese official data to show that China's economy is slowing down and then you said you don't believe it. Where is your logic?

 

[xizhimen]

Do you believe Vietnamese data?

 

[Viva_vietnamm]

It's funny that you posted Chinese official data to show that China's economy is slowing down and then you said you don't believe it. Where is your logic?

Sue the website if it is Not true, pls stop spamming, bro. I just post the news from legal websites.

 

[xizhimen]

Sue the website if it is Not true, pls stop spamming, bro.

Selective belief? You posted one China data to show your point and later on you said the data is fake. are you trying to slap yourself in the face?

 

[Viva_vietnamm]

Selective belief? You posted one China data to show your point and later on you said the data is fake. are you trying to slap yourself in the face?

U can't deny it:

----------------------------

China's local authorities have even admitted so many times in recent years. In January 2017, the Liaoning provincial government admitted to exaggerating the province's economic data from 2011-14. A year later, a city in Inner Mongolia revised its 2017 economic data after redundancy. admitted that they had added “fake data”.

 

[xizhimen]

U can't deny it:

----------------------------

China's local authorities have even admitted so many times in recent years. In January 2017, the Liaoning provincial government admitted to exaggerating the province's economic data from 2011-14. A year later, a city in Inner Mongolia revised its 2017 economic data after redundancy. admitted that they had added “fake data”.

Do you believe it or not? if you don't believe it, your top posts and this whole thread started by you are meaningless, their arguments are based on the Chinese official data.

 

[Viva_vietnamm]

Do you believe it or not? if you don't believe it, your top posts and this whole thread started by you are meaningless, their arguments are based on the Chinese official data.

Chinese official data ?? So, CN chaos in 2023 like I predicted in 2018 is also Chinese official data ??

Stop spamming, bro, Your knowledge of economic matter is too poor to argue.

 

[xizhimen]

Chinese official data ?? So, CN chaos in 2023 like I predicted in 2018 is also Chinese official data ??

Stop spamming, bro, Your knowledge of economic matter is too poor to argue.

Can you answer the question? Do you believe the data or not? Your OP is based on this data, if you don't believe it,this whole thread and all of your previous posts become meaningless.

 

[Viva_vietnamm]

Can you answer the question? Do you believe the data or not? Your OP is based on this data, if you don't believe it,this whole thread and all of your previous posts become meaningless.

Your question only prove that Your knowledge of economic matter is too poor to argue.

Show me which previous posts become meaningless first ?? otherwhile I will report to delete all of your spamming posts

 

[xizhimen]

Your question only prove that Your knowledge of economic matter is too poor to argue.

Show me which previous posts become meaningless first ?? otherwhile I will report to delete all of your spamming posts

Your OP post, if you don't believe this data, your whole thread is out.

"The series of data that the government will release next Monday will show how bad the story is. Economists polled by Bloomberg news forecast China's gross domestic product (GDP) growth to be only 5% in the third quarter of this year, from the 7.9% increase achieved in the second quarter."

 

[Viva_vietnamm]

Your OP post, if you don't believe this data, your whole thread is out.

"The series of data that the government will release next Monday will show how bad the story is. Economists polled by Bloomberg news forecast China's gross domestic product (GDP) growth to be only 5% in the third quarter of this year, from the 7.9% increase achieved in the second quarter."

See, u don't understand anything abt economic matters. How do Chinese learn from CN University of Economics ?? The teachers force u to belive in government data ??

first: U don't need to believe in any data, no one force u to do it .

Sec : Those information is for reference only.

Third: My posts abt CN economy are just like a warning : ( predicted in 2020 abt Evergrande collpase ), u don't have to believe it, but when it happened ( Evergrande just collpased), then u must admit my warning is correct.

 

[xizhimen]

first: U don't need to believe in any data, no one force u to do it .

I m asking if you believe it or not. What I believe it or not doesn't matter to your OP post in this thread.

 

[Viva_vietnamm]

I m asking if you believe it or not. What I believe it or not doesn't matter to your OP post in this thread.

How do Chinese learn from CN University of Economics ?? The teachers force u to belive in government data ??

Is your major in economics? If not, pls don't ask nonsense questions. go back to school and learn abt economy first

 

[Viva_vietnamm]

For anyone who interested in economic matters, what we learned from VN University of Economics :

first: U don't need to believe in any data, no one force u to do it .

Sec : Information is for reference only.

2. Archives for research and development of S&T potential in all socio-economic fields of the province



For the field of science and technology, archival documents also have special values, because inheritance in scientific research is a mandatory requirement. Most scientific research topics in each specific field must learn about the situation and related research results of the predecessors. Therefore, scientific research topics, after being applied in practice, are stored and become references for further research projects.

https://ccvtlt.snv.binhdinh.gov.vn/index.php/vi/dao-tao-ung-dung-nghien-cuu/nghien-cuu-khoa-hoc/vai-tro-cua-tai-lieu-luu-tru-doi-voi-viec-nghien-cuu-phat-trien-tiem-luc-kh-cn-tren-tat-ca-cac-linh-vuc-kinh-te-xa-hoi-cua-tinh-38.html

Third: there is a subject called Economic Forecasting, and they said :

• Since politics is highly partisan, many rational people regard economic forecasts produced by governments with healthy doses of skepticism.

--------------------------------------------------------------------------------------------------------

What Is Economic Forecasting?​

Economic forecasting is the process of attempting to predict the future condition of the economy using a combination of important and widely followed indicators.


Economic forecasting involves the building of statistical models with inputs of several key variables, or indicators, typically in an attempt to come up with a future gross domestic product (GDP) growth rate. Primary economic indicators include inflation, interest rates, industrial production, consumer confidence, worker productivity, retail sales, and unemployment rates.

KEY TAKEAWAYS​

• Economic forecasting is the process of attempting to predict the future condition of the economy using a combination of widely followed indicators.
• Government officials and business managers use economic forecasts to determine fiscal and monetary policies and plan future operating activities, respectively.
• Since politics is highly partisan, many rational people regard economic forecasts produced by governments with healthy doses of skepticism.
• The challenges and subjective human behavioral aspects of economic forecasting also lead private-sector economists to regularly get predictions wrong.

How Economic Forecasting Works​

Economic forecasts are geared toward predicting quarterly or annual GDP growth rates, the top-level macro number upon which many businesses and governments base their decisions with respect to investments, hiring, spending, and other important policies that impact aggregate economic activity.


Business managers rely on economic forecasts, using them as a guide to plan future operating activities. Private sector companies may have in-house economists to focus on forecasts most pertinent to their specific businesses (e.g., a shipping company that wants to know how much of GDP growth is driven by trade.) Alternatively, they might rely on Wall Street or academic economists, those attached to think tanks or boutique consultants.


Understanding what the future holds is also important for government officials, helping them to determine which fiscal and monetary policies to implement. Economists employed by the federal, state or local governments play a key role in helping policymakers set spending and tax parameters.


Since politics is highly partisan, many rational people regard economic forecasts produced by governments with healthy doses of skepticism. A prime example is the long-term GDP growth forecast assumption in the U.S. Tax Cuts and Jobs Act of 2017 that projects a much smaller fiscal deficit that will burden future generations of Americans—with drastic implications to the economy—than independent economist estimates.

Limitations of Economic Forecasting​

Economic forecasting is often described as a flawed science. Many suspect that economists who work for the White House are forced to toe the line, producing unrealistic scenarios in an attempt to justify legislation. Will the inherently flawed self-serving economic forecasts by the Federal government be accurate? As with any forecast, time will tell.


The challenges and subjective human behavioral aspects of economic forecasting are not limited to the government. Private-sector economists, academics, and even the Federal Reserve Board (FSB) have issued economic forecasts that were wildly off the mark. Ask Alan Greenspan, Ben Bernanke or a highly compensated Wall Street or ivory tower economist what GDP forecasts they produced in 2006 for 2007-2009—the period of the Great Recession.


Economic forecasters have a history of neglecting to foresee crises. According to Prakash Loungani, assistant director and senior personnel and budget manager at the International Monetary Fund (IMF), economists failed to predict 148 of the past 150 recessions.


Loungani said this inability to spot imminent downturns is reflective of the pressures on forecasters to play it safe. Many, he added, prefer not to stray away from the consensus, mindful that bold projections could damage their reputation and potentially lead them to lose their jobs.

Special Considerations​

Investors should also not overlook the subjective nature of economic forecasting. Predictions are heavily influenced by what type of economic theory the forecaster buys into. Projections can differ considerably between, for example, one economist that believes business activity is determined by the supply of money and another that maintains that hefty government spending is bad for the economy.


The forecaster’s personal theory on how the economy works dictates what type of indicators will be paid more attention to, potentially leading to subjective or biased projections.
Many conclusions do not come from objective economic analysis. Instead, they are regularly shaped by personal beliefs on how the economy and its participants work. That inevitably means that the impact of certain policies will be judged differently.

History of Economic Forecasting​

Economic forecasting has been around for centuries. However, it was the Great Depression of the 1930s that gave birth to the levels of analysis we see today.


After that disaster, a greater onus was placed on understanding how the economy works and where it is heading. This led to the development of a richer array of statistics and analytical techniques.

Economic Forecasting: Definition, Use of Indicators, and Example

Economic forecasting is the process of attempting to predict the future condition of the economy using a combination of widely followed indicators.

www.investopedia.com

 

[Viva_vietnamm]

The 'tsunami' engulfed China's real estate sector: More and more companies defaulted
November 1, 2021 -

"We're going to see more offers for payment extensions or even a few defaults in the coming weeks and months," said Eddie Chia, portfolio manager at China Life Franklin.
One of China's 20 biggest real estate developers is joining the "club" of extending bond payments to avoid default. Companies repeatedly made this announcement after the industry's debt crisis made it difficult for them to raise capital in foreign financial markets.

Yango Group is seeking to renew three types of USD bonds because "current resources may not be able to meet it", according to a filing with the stock exchange. The Shanghai-based construction company, which is ranked 18th in China in terms of contract sales, is preparing to extend the repayment period to raise more capital and avoid default.

Shares of Yango fell 8.4% on November 1 on the Shenzhen Stock Exchange, hitting a seven-year low. The company's high-yield yuan-denominated bond fell for eight straight days after falling to nearly 9 cents last month, ending two months of its longest slide in a decade.

The average price of bonds issued by Chinese developers fell by the most in a decade.

Recently, many Chinese developers have been working to extend the repayment period, amid the country's government's strict control of the real estate sector and Evergrande's debt crisis. Last month, Xinyuan Real Estate Co. approved a bond swap proposal to avoid default.

"We're going to see more offers or even a few defaults in the coming weeks and months," said Eddie Chia, portfolio manager at China Life Franklin.

He said: "Yango is a top developer with healthy performance, despite the high leverage ratio. But clearly, they are at risk by a crisis of confidence. Other developers in the market. USD bonds are much smaller in size than Yango, most bond issuers wouldn't be able to survive if the market completely turned against them."


The bond payment extension is only a temporary solution. Investors are anticipating that the move will allow companies to improve liquidity as the primary stock market reopens to indebted Chinese companies, though it is uncertain when. when.

Fitch Ratings emphasizes that Xinyuan's default risk remains at high, even though it previously upgraded its developer bond rating from RD to CC. Even if builders were able to defer payments on short-term bonds, it would still be difficult for them to improve their financial health as sales tumble and profits tumble. China's top 100 developers recorded a 32.2% year-over-year decline in revenue in October.

China's increasingly stringent surveillance measures against the weakest of companies will make it impossible for many of them to renew payments. For example, Modern Land China Co. failed to make principal and interest payments on a $250 million bond at the end of last month. They have offered to extend the maturity by 3 months.

Last month, at least four Chinese developers defaulted because of their inability to access refinancing channels, raising fears of a chain default. Some of the junk bond issuers that recorded the steepest declines are having $2 billion in bond payments both at home and abroad that are due in November.

Meanwhile, the volume of USD bonds sold by Chinese developers is falling to the lowest level since the pandemic hit the market last year. In October, eight real estate companies sold $1.25 billion of bonds, down 81% from a year earlier. This figure is the lowest since these businesses sold $287 million in April 2020.

Những đợt 'sóng thần' nhấn chìm lĩnh vực bất động sản Trung Quốc: Hiệu ứng domino vỡ nợ dồn dập, doanh số của 100 công ty lao dốc

Eddie Chia – giám đốc danh mục đầu tư tại China Life Franklin, cho biết: "Chúng ta sẽ chứng kiến nhiều đề nghị gia hạn thanh toán hoặc thậm chí là vài trường hợp vỡ nợ trong những tuần, tháng tới."

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