February 24, 2024 10:08 am

China Faces Financial Turmoil as Widespread Defaults Loom Amidst Cash Crunch – Citizen Watch Report

Facebook
Twitter
LinkedIn
Pinterest
WhatsApp
Telegram

URGENT: JUST 11 DAYS REMAIN TO HELP SAVE INDEPENDENT MEDIA & ANR, TO ENSURE WE ARE FULLY FUNDED FOR NEXT MONTH,SO LET'S CUT THE BS & GET TO THE POINT - WE WILL BE FORCED LAY OFF STAFF & REDUCE OPERATIONS UNLESS WE ARE FULLY FUNDED WITHIN THE NEXT 2 WEEKS - Sadly, less than 0.5% of readers currently donate or subscribe to us But YOU can easily change that. Imagine the impact we'd make if 3 in 10 readers supported us today. To start with we’d remove this annoying banner as we could fight for a full year...

Cash-strapped Chinese borrowers are encountering a new wave of financial challenges, with fears of widespread defaults rattling a market that heavily relies on quasi guarantees from banks. Sales of China dollar notes, accompanied by standby letters of credit—a lender’s commitment to repayment if the issuer defaults—have plummeted by a staggering 90%, totaling just $1.04 billion so far this year compared to the previous year, according to Bloomberg-compiled data.

This decline outpaced an already concerning 52% drop in China dollar bond sales, which now stand at $52.2 billion for the same period. The situation is exacerbated by a surge in bank funding costs in Hong Kong, with a gauge of one-month Hong Kong interbank offered rate (Hibor) rising to 5.53%, the highest in 16 years. This spike is due to a growing demand for local currency as banks accumulate cash for regulatory requirements, draining capital from the interbank system.

Adding to the economic turmoil, one of China’s largest shadow banks, Zhongzhi Enterprise Group, has issued a stark warning of being “severely insolvent.” In a letter to investors, Zhongzhi revealed that its liabilities, amounting to $64 billion, have surpassed its estimated assets of about $38 billion. This revelation triggered an immediate investigation by Chinese authorities into “suspected illegal crimes” against the shadow banking giant.

The struggling financial firm’s plight further highlights the challenges facing China’s financial sector, raising concerns about the stability of the nation’s economy. With the government now probing major shadow banks, including Zhongzhi Enterprise Group, the already precarious situation is intensifying, casting a shadow on the future of China’s financial landscape.

Sources:

China Bank-Backed Dollar Bond Sales Plunge Amid Default Jitters – Bloomberg

HongKong Cash Demand Sends Local Bank Rate to 16-Year High – Bloomberg

China’s Troubled Shadow Bank Zhongzhi Warns of Insolvency – Bloomberg

Zhongzhi Enterprise Group: China investigates major shadow bank for ‘crimes’

Source link

Opinion pieces don’t necessarily reflect the position of our news site but of our Opinion writers.

Original Source: China Faces Financial Turmoil as Widespread Defaults Loom Amidst Cash Crunch – Citizen Watch Report

Support the ANR from as little as $8 – it only takes a minute. If you can, please consider supporting us with a regular amount each month. Thank you.

Related News

Let’s not lose touch…Your Government and Big Tech are actively trying to censor the information reported by The ANR to serve their own needs. Subscribe now to make sure you receive the latest uncensored news in your inbox…

Australian National Review is Australia’s first real free and independent press, one with no editorial control by the elite, but a publication that can generate critical thinkers and critical debate and hold those spreading mistruths and deliberate propaganda in mainstream media to account.

News with a difference that will be educational, compelling and create a platform for political and social change in this country and address the real issues facing this country and the world.

Discover more from The ANR

Subscribe now to keep reading and get access to the full archive.

Watch Full Documentary

URGENT: JUST 3 DAYS REMAIN TO HELP SAVE INDEPENDENT MEDIA & ANR, SO LET'S CUT THE BS & GET TO THE POINT - WE WILL BE FORCED TO LAY OFF STAFF & REDUCE OPERATIONS UNLESS WE ARE FULLY FUNDED WITHIN THE NEXT 2 WEEKS

Sadly, less than 0.5% of readers currently donate or subscribe to us But YOU can easily change that. Imagine the impact we'd make if 3 in 10 readers supported us today. To start with we’d remove this annoying banner as we could fight for a full year...

Get access to TruthMed- how to save your family and friends that have been vaxx with vaccine detox, & how the Unvaxxed can prevent spike protein infection from the jabbed.

Free with ANR Subscription from $8