- Evergrande is also a risk to the CCP
- Hamburg welcomes Cosco entry
- Debate over subsidies: CAI is no knight in shining armor
- Less activity in manufacturing sector
- Regulation has little impact on investors
- Authorities flesh out Data Security Law
- Johnny Erling on the resurgence of the Danwei
Tens of thousands of retail investors in China are currently fearing for their savings. They have put a lot of money into Evergrande’s asset products and are now wondering whether the state will intervene and save them or whether Evergrande will stop making its payments. Many are taking to the streets, some even taking their frustrations out directly on Evergrande’s founder. The disaster surrounding the real estate giant also threatens Xi Jinping’s CCP. The way Xi will resolve this crisis will help determine its future, analyzes Ning Wang.
China’s state subsidies continue to worry the German economy. Companies from the People’s Republic have caught up so much -not the least thanks to said subsidies – that they are now even competing with the highly advanced German export economy. But what can be done about the high state subsidies? Economic experts addressed this in the “Global China Conversations” series by the IfW Kiel. The conclusion: the EU’s investment agreement with China is not a “knight in shining armor”, the WTO is blocked, and additional trade instruments are risky, analyses Amelie Richter.
Johnny Erling devotes today’s column to the reconstruction of the Danwei system. These work units long served the CCP as their lowest level of administration. Until the economic reforms, they almost completely controlled the daily lives of the city populace. But now it seems like the Danwei are being resurrected. Even during the Covid pandemic, remnants of these work units controlled strict enforcement as a kind of overwatch. With high-tech and artificial intelligence, surveillance could return with renewed fervor.
Have a relaxing weekend!
Nico Beckert
Feature
Is Evergrande leaving its retail investors hanging?
Ms. Liu from Shanghai had been offered an interest rate of 7.5 percent by her bank consultant if she invested in Evergrande securities. She made the investment since few other financial products offer such high returns. Evergrande’s wealth management products are considered as good as “guaranteed”, as her bank called it – which also assured her that Evergrande’s financial products would “offer a steady return for conservative investors.”
Since it was made public that the property developer, which sells asset management products for small retail investors as well as bonds for major investors and banks, has been sitting on a mountain of debt of more than $300 billion, Ms. Liu has had many sleepless nights. “I have invested all my savings. It’s our retirement savings. We worked hard for it. Now it’s all gone,” she tells China.Table.
She is one of about 80,000 small investors who have invested their money in Evergrande’s financial products. Like Ms. Liu, Evergrande employees, their family members, friends, and acquaintances have invested in Evergrande Wealth Management products over the past five years: The equivalent of more than €13.3 billion has been invested. Evergrande’s wealth management branch is known throughout China for its real estate projects and enjoyed an excellent reputation due to the public presence of the real estate giant.
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