China’s stock market crash has tripled this year, reflecting Beijing’s efforts to reduce the risk of a 17tn market crash in the country following a number of shortcomings.
International organizations and financial institutions have repeatedly criticized China very high calculating corporate debt and low interest rates soon, which shows the lack of transparency and the assumption that the government will save the suffering companies.
But 366 bonds were lowered in the first four months of 2021, compared with 109 in the same period last year, according to information from Wind suppliers.
The increase followed a warning in November by Liu He, the deputy prime minister of China, that Beijing would “absolutely tolerate” corporate theft after several errors and state-owned enterprises.
Authorities are urging debt collectors, accountants and accountants to promote temporary risks, experts say.
Among the hundreds of cuts this year were bonds issued by HNA, former buyers who have struggled with debt and financial crisis for nearly five years, and Start Unigroup, an important online retailer who has faced questions about debt repayment since 2018.
Charles Chang, China’s leading S&P Global Ratings leader in Hong Kong, says the negative publicity of Chinese companies is “beginning to change”.
“If the adoption law is in effect, you should see an increase in the timeliness that proves the problem… Does not mean that the problem is exacerbated, it just means that the increase indicates the suffering,” Chang said.
S&P noted that more than 80% of Chinese non-business companies were counted twice A. Under this section, Chinese companies will not be able to provide public equity loans.
Five accounting and auditing firms for which the Financial Times did not respond.
Chinese regulators have struggled for years to be able to showcase their products in the country’s stock markets. Increased monitoring by regulators has been difficult in state-owned enterprises with large debts, researchers said.
His goal has grown since the government-sponsored joint venture with Yongcheng Coal and Electricity in November. sent waves through Chinese economic channels.
Some of the shortcomings may have been caused by the economic devastation caused by the coronavirus, researchers said, even though China returned to the epidemic before economic growth by the end of 2020.
Xiaoxi Zhang, a researcher at Gavekal Dragonomics, said Chinese leaders have chosen “hidden loans” to be more important this year, and is working to change market perceptions that many companies have “sufficient assurance” that the government can release them.
“The government wants to take advantage of the rapid growth of the Covid rebound to address the crisis,” he wrote in the study.
“And it is also because the increase in debt and the removal of monetary policy can lead to financial problems if hidden loans are not managed properly.”
S&P’s Chang, however, also noted that China’s volatile prices remain relatively low. “China’s tensions should be doubled or tripled to reach the level you see in the US, Europe and the coming markets,” he said.
Extras quoted by Sherry Fei Ju in Beijing