• About Us
  • Careers
  • Brand Partnerships
TFI Official Merchandise
TFI English
TFI हिन्दी
Tuesday, February 7, 2023
TFIGlobal
TFIGlobal
Right Arm. Round the World. FAST.
No Result
View All Result
  • Premium
  • Indo-Pacific
  • Americas
  • Canada
  • Indian Subcontinent
  • West Asia
  • Europe
  • Africa
  • The Caribbean
  • Premium
  • Indo-Pacific
  • Americas
  • Canada
  • Indian Subcontinent
  • West Asia
  • Europe
  • Africa
  • The Caribbean
TFIGlobal
TFIGlobal
No Result
View All Result

China’s companies are on a defaulting spree and it is not just hurting China but also China-loving companies abroad

Akshay Narang by Akshay Narang
December 14, 2020
in Indo-Pacific
Reading Time: 2 mins read
0
china five year plan 5 debt

(PC: Free Press Journal)

264
VIEWS
Share on FacebookShare on Twitter

China’s economy has landed into deep trouble, owing to a range of issues including a severe food security crisis, the downfall of the Chinese tech industry and a global outrage against Beijing. And now, Chinese companies have started defaulting. Some of the biggest state-owned Chinese companies are defaulting, which is hurting not just Chinese citizens but also Sinophilic companies outside China. 

As per WION, global investors are now becoming worried about China’s massive debt crisis. After all, we are not talking about random Chinese firms, but some of the most famous state-owned companies in the Communist nation. The state-backed Chinese firms have failed to pay back as much as $6 billion this year in bad loans.

Also Read

Cuba receives an ‘unexpected gift’ from Central Asia to solve its energy woes

It’s Official: Qatar Had A Role In Taliban 2.0

One of the prominent default cases is that of Huachen Automotive Group. Earlier this year, Huachen defaulted on payment of principal and interest of a 1 billion yuan bond, that is, $151.88 million bond. Huachen is actually the state-owned parent of Brilliance China Automotive Holdings, a well-known automaker listed in Hong Kong that partners with BMW and manufactures luxury German cars.

Another leading Chinese state-owned enterprise- Tsinghua Unigroup defaulted and failed to repay the principal on a $450 million bond. The company owes an additional debt of $2 billion and the investors are, of course, worried by the default in connection with $450 million bonds. 

Another shocking default case is that of Yongcheng coal and electricity, a famous Chinese State-owned enterprise, known as China’s ‘Grey Rhino’. It recently failed to repay a bond worth around $152 million. The default came as a major shock as the coal mining company’s bond was rated “triple-a”- the highest possible rating that any bond can get in a market. 

A “triple-a” bond from Chinese state-owned enterprise would have been considered a safe bet by many including overseas investors. However, the Chinese government looks unlikely to bail out the defaulting company. In fact, the Chinese government is itself mired in debt trouble.

China’s local government debt is expected to hit $4 trillion. Serving and former Chinese Finance Ministry officials are alarmed about the awkward situation. There is a real risk of the Chinese government itself committing a default upon its lenders. Apparently, the Chinese government can neither finance its companies properly nor assure its own lenders about its capacity to meet debt obligations. 

What about lenders? As per WION, they are no longer sure about the Chinese government bonds. So, these lenders are demanding even higher interest rates. 

The Chinese Communist Party (CCP) and its propaganda machinery want us to believe that the Chinese economy is growing at a rapid pace. But the reality is that China is so cash-strapped that it cannot even repay its loans. Money is drying up in China, as the great Chinese default is hurting not just the Chinese citizens, but also the overseas investors.

Tags: Short takes
ShareTweetSend
Previous Post

After being rejected a state visit, Xi Jinping skips Nanking massacre anniversary and invites Japan’s foreign minister to woo Suga

Next Post

Why is Russia soft on Turkey? The reason is a NATO divide that helps Russia bring the West closer to it as Turkey goes down on its own

Also Read

Mongolia’s biggest shock to China is here

Mongolia’s biggest shock to China is here

February 5, 2023
EU Xinjiang

EU’s malicious encashment of forced labour is a revelation of its true evil face

February 4, 2023
China Children

China comes up with a bizarre idea to overcome demographic challenges

February 1, 2023
Czech Republic Taiwan

Taiwan friends a new ally in the Balkans

February 1, 2023
Load More

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

I agree to the Terms of use and Privacy Policy.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

  • Trending
  • Comments
  • Latest
US Ukraine

Russia unearths USA’s empire of terror in Ukraine

February 4, 2023
Mongolia’s biggest shock to China is here

Mongolia’s biggest shock to China is here

February 5, 2023
Did Ukraine use innocent civilians as human shield against Russia in the name of evacuation?

Did Ukraine use innocent civilians as human shield against Russia in the name of evacuation?

May 9, 2022
Jordan B Peterson

The proposed demise of World Economic Forum! Courtesy- Jordan B. Peterson

February 2, 2023
Nord Stream US

An energy-secured Germany blames US for Nord Stream sabotage for the first time

February 4, 2023
Barbados is Cancered Literally and Figuratively

Barbados is Cancered Literally and Figuratively

February 7, 2023
Mauritania

Algeria, Morocco, Mauritania, and Iran: A geostrategic upheaval is playing in North Africa

February 7, 2023
TikTok advertising

Ignorant to his duties, Trudeau coughs up $21 million of taxpayers’ money for TikTok

February 7, 2023
Ukraine war

Zelensky was All Set to be Removed in a Coup but Things Changed Pretty Drastically

February 7, 2023
Mali human rights chief

After France, Mali throws UN out

February 7, 2023
Youtube Twitter Facebook
TFIGlobal
  • About us
  • Contact Us
  • Terms of use
  • Privacy Policy

©2023 - TFI MEDIA PRIVATE LIMITED

No Result
View All Result
  • Premium
  • Indo-Pacific
  • Americas
  • Canada
  • Indian Subcontinent
  • West Asia
  • Europe
  • Africa
  • The Caribbean

©2023 - TFI MEDIA PRIVATE LIMITED

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In

Add New Playlist

Follow us on Twitter

and never miss an insightful take by the TFIGlobal team

Follow @tfiglobal
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. View our Privacy and Cookie Policy.