Is China luring other emerging markets into a "debt trap"? China's particular form of foreign aid invites misunderstanding. A thorough analysis of openly available data by researchers provides a much more nuanced picture.
By Redaktion Table
Huachen Automotive was forced into bankruptcy. Bank Huarong, on the other hand, was rescued. HNA has to go through a painful restructuring. And Evergrande? The decisions to rescue or restructure ailing companies expose Beijing's strategy towards financial market risks. The dilemma faced by Chinese planners is strikingly similar to that faced by regulators in Western countries.
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One of China's most complicated insolvency cases enters the next round: The HNA Group from Hainan in southern China is split into four independently managed business units. HNA is the parent company of the renowned Hainan Airlines, the only airline that services direct routes from Beijing to Berlin. The tourism company definitely still has a future – if it operates more frugally and efficiently in the future.
By Frank Sieren
Evergrande's default is emblematic of the systemic problems Chinese real estate groups are facing. For many years, the real estate boom fueled both the country's credit and construction industries. But now the group's shares are falling to their lowest level in six years. Fears of a domino effect are running high.
By Ning Wang
During the Covid epidemic, the Chinese state has enabled local governments to borrow at record levels. They are supposed to use it to pay for infrastructure projects and thus boost the economy. As a result, China's economy has grown as desired but so has the debt burden. Depending on how it is calculated, it even exceeds US debt as a share of GDP. But China has some decisive advantages.
By Frank Sieren
