Tuesday, October 26News That Matters

Tag: Economic Conditions and Trends

China Evergrande Makes Payment to Dodge Default, Media Says

China Evergrande Makes Payment to Dodge Default, Media Says

Business
HONG KONG — China Evergrande, the troubled property giant that is teetering on the edge of collapse, appears to have bought itself a little more time.On Friday, the world’s most indebted property developer made an $83.5 million interest payment to bondholders, according to Securities Times, an official newspaper. The outlet, which is backed by People’s Daily, the Communist Party’s official newspaper, didn’t offer further details.The payment came with just one day left on a 30-day grace period to avoid a default. The company gripped global financial markets a month ago when it skipped a payment to foreign bondholders, raising the prospect that it could leave global investors with billions of dollars in losses and cause ripples within China’s property market, a key component of the country’s...
Boris Johnson Promotes Rising Wages Amid Shortages in U.K.

Boris Johnson Promotes Rising Wages Amid Shortages in U.K.

Business
In a country bedeviled by acute shortages of goods and workers, Prime Minister Boris Johnson is portraying the chaos as a source of national revival.Gas stations in Britain have recently had no gas and grocery items are sparse in part because of difficulties in delivering such goods. That is in part due to Britain’s abandonment of the European Union — a reordering championed eagerly by Mr. Johnson. Brexit has dissuaded Eastern European immigrants from coming to work as truck drivers, while new customs procedures at ports has snarled trade.Yet far from bemoaning such troubles, Mr. Johnson is celebrating them as the tough parts of a critically needed economic restoration. In his telling, Brexit has delivered a benefit that Britain has lacked for more than a decade: rising wages.“We are embar...
China Evergrande Gets Soft Treatment in Chinese Media

China Evergrande Gets Soft Treatment in Chinese Media

Business
As China Evergrande Group teeters on the edge of collapse, videos of protesting home buyers have flooded social media. Online government message boards teem with complaints and pleas for intervention to save the huge property developer. The hashtag “What does Evergrande mean for the real estate market?” has been viewed more than 160 million times on one platform.But if trouble threatens for China’s economy, you wouldn’t know it from reading the country’s front pages.The name “Evergrande” has barely been mentioned by top state-run news outlets in recent weeks, even as the company’s uncertain fate has rattled global financial markets. Coverage of its recent troubles has been concentrated in a handful of business publications.Only on Friday did the country’s central bank comment on the compan...
China’s Power Problems Expose a Strategic Weakness

China’s Power Problems Expose a Strategic Weakness

Business
BEIJING — A bread company can’t get all the power it needs for its bakeries. A chemicals supplier for some of the world’s biggest paint producers announced production cuts. A port city changed electricity rationing rules for manufacturers four times in a single day.China’s electricity shortage is rippling across factories and industries, testing the nation’s status as the world’s capital for reliable manufacturing. The shortage prompted the authorities to announce on Wednesday a national rush to mine and burn more coal, despite their previous pledges to curb emissions that cause climate change.Mines that were closed without authorization have been ordered to reopen. Coal mines and coal-fired power plants that were shut for repairs are also to be reopened. Tax incentives are being drafted f...
Global Tax Agreement Will Set 15% Minimum Rate

Global Tax Agreement Will Set 15% Minimum Rate

Business
More than 130 nations agreed on Friday to a sweeping overhaul of international tax rules, with officials backing a 15 percent global minimum tax and other changes aimed at cracking down on tax havens that have drained countries of much-needed revenue.The Organization for Economic Cooperation and Development, which has been leading the negotiations, said 136 countries and jurisdictions had signed on to the deal.“Today’s agreement will make our international tax arrangements fairer and work better,” Mathias Cormann, the organization’s secretary general, said in a statement. “We must now work swiftly and diligently to ensure the effective implementation of this major reform.”The agreement is the culmination of years of fraught negotiations that were revived this year after President Biden too...

China Power Outages Close Factories and Threaten Growth

Business
DONGGUAN, China — Power cuts and even blackouts have slowed or closed factories across China in recent days, adding a new threat to the country’s slowing economy and potentially further snarling global supply chains ahead of the busy Christmas shopping season in the West.The outages have rippled across most of eastern China, where the bulk of the population lives and works. Some building managers have turned off elevators. Some municipal pumping stations have shut down, prompting one town to urge residents to store extra water for the next several months, though it later withdrew the advice.There are several reasons electricity is suddenly in short supply in much of China. More regions of the world are reopening after pandemic-induced lockdowns, greatly increasing demand for China’s electr...
U.K. Offers Thousands of Visas to Foreign Truckers to Ease Driver Shortage

U.K. Offers Thousands of Visas to Foreign Truckers to Ease Driver Shortage

Business
Though business groups generally welcomed the government’s move, some expressed doubt that it would be sufficient. The government’s reversal also comes after the hauling and logistics industries in Britain pleaded with lawmakers to ease restrictions on visas for drivers from the European Union. Logistics U.K., a trade group, had sought 10,000 seasonal visas for drivers, similar to a program for farm workers.“While we welcome the visa scheme to allow H.G.V. drivers from abroad to help temporarily fill domestic shortages in food and fuel logistics, the limit of 5,000 visas will do little to alleviate the current shortfall,” said Andrew Opie, the director of food and sustainability at the British Retail Consortium, a trade association, referring to drivers of heavy goods vehicles.“Supermarket...
How China Plans to Avert an Evergrande Financial Crisis

How China Plans to Avert an Evergrande Financial Crisis

Business
“The government can place them under watch and pressure them through their employers or relatives not to make trouble,” said Minxin Pei, a professor of government at Claremont McKenna College who is writing a study of China’s domestic security apparatus.China has a lot riding on its ability to contain the fallout from an Evergrande collapse. After Xi Jinping, China’s most powerful leader in generations, began his second term in 2017, he identified reining in financial risk as one of the “great battles” for his administration. As he approaches a likely third term in power that would start next year, it could be politically damaging if his government were to mismanage Evergrande.But China’s problem may be that it controls financial panics too well. Economists inside and outside the country a...
China Detains Top HNA Group Executives

China Detains Top HNA Group Executives

Business
BEIJING — The authorities in China have taken into custody the top two executives of a conglomerate that bought up businesses around the world before quickly collapsing under heavy debts, the latest move to discipline the country’s corporate leaders.The conglomerate, a transportation and logistics company called HNA Group, said late on Friday that the police on Hainan Island, where it is based, had seized its chairman, Chen Feng, and chief executive, Tan Xiangdong.Both men were detained “in accordance with the law for suspected crimes,” the company said in a statement, without specifying those offenses. HNA did not immediately respond to requests for comment.The detention of the two men comes as global investors await the fate of another troubled Chinese corporate giant, China Evergrande G...
China Evergrande Bond Payment Remains Uncertain

China Evergrande Bond Payment Remains Uncertain

Business
China Evergrande, the property giant whose financial troubles roiled global markets earlier this week, left investors in a state of uncertainty again on Thursday with the fate of an $83 million interest payment still unresolved.The payment, on Evergrande’s dollar-denominated bonds, was due Thursday. By the end of the business day in New York, the company had still not said publicly whether it had made the payment or planned to.One bondholder, speaking on condition of anonymity to discuss the matter, said they had not been paid. But, this person noted, the company’s debt covenants provide it with a 30-day grace period before the missed payment results in a default, which means the limbo debtholders find themselves in could continue.The concern extends to property owners and policymakers in ...