Posted by IDQWE001 > 2023-04-11 23:16 | Report Abuse

"BLACK HOLES"
"The LGFVs have become the black hole of the Chinese financial system. They have been used to fill the gap between local government revenue and expenditure," said Andrew Collier managing director at Orient Capital Research.

"They have little or no profit, and cannot pay back their debt owed," he said. "I expect many LGFVs to collapse, or to be quietly recapitalized by banks, putting some rural banks and some bondholders at risk of defaults."

The total debt of China's LGFVs has swelled to a record 66 trillion yuan ($9.5 trillion), equivalent to half of the country's economy, from 57 trillion yuan last year, according to an International Monetary Fund (IMF) report last month.

Concerns about their worsening credit profile come as the government is trying to lift the economy from the grip of a property debt crisis in the last couple of years, which saw a number of developers default on their debt and land sale revenues plummet, forcing Beijing to roll out a slew of supportive measures."LGFVs are under considerable pressure on debt repayment this year, because their income is often associated with real estate and land sales," said Wang Tao, chief China economist at UBS.

CAUTIOUS LENDERS
Chinese Premier Li Keqiang listed "preventing and defusing local government debt risks" as one of the major tasks for the government in the upcoming year, when he delivered the government report on Sunday as China's two sessions kicked off.

That priority comes as some Chinese banks with exposure to LGFVs are increasingly getting requests to extend their near-term maturities by as much as six months and reduce interest rates, three sources with knowledge of the matter said.

The sources, who declined to give details, could not be identified due to the sensitivity of the matter.

Chinese banks and other financial institutions have been cautious on new lending to LGFVs over the past years.

In recent months, some state-owned banks, asset managers, and insurers have been looking into their portfolios to screen LGFV borrowers with weaker creditworthiness and dispose them, separate financial sector sources told Reuters.

Faced with tighter credit criteria at home, LGFVs turned to offshore markets and raised a record $39.5 billion via dollar bonds last year, according to rating agency S&P. Offshore branches of Chinese financial institutions have been major buyers of the bonds, industry sources said.

Since late 2022, however, authorities have sharpened scrutiny of LGFVs dollar bond issuance. The National Development and Reform Commission (NDRC) turned down requests from units with lower credit ratings, said two separate sources with knowledge of the matter, as part of its efforts to stem financial sector risks.

The NDRC and the China Banking and Insurance Regulatory Commission didn't immediately respond to requests for comment.

DEFAULT WORRIES
A deterioration in capital-market access can increase refinancing risk and deepen the liquidity crunch for the LGFV sector, Fitch Ratings said in a report last month, adding units in less economically developed regions are more at risk.

The worsening outlook for LGFVs has also made some shadow banks -- lenders for sectors that are unable to tap bank funding directly -- worried about their exposure to such units and averse to fresh lending.

"LGFVs used to be financed in the shadow banking (sector) but increasingly it has moved to the onshore bond market and, in some cases, offshore," said Alicia García Herrero, chief economist for Asia Pacific, at Natixis.

"It seems clear to me that a number of projects may default with consequences for bondholders, specially offshore ones."

Some analysts believe that Chinese authorities would avoid large scale of defaults by LGFVs as that would make debt market access tougher for both public and private issuers at a time when efforts are being made to revive the economy after the dismantling of three years of tough COVID-19 measures.

"LGFV debt itself as a share of GDP is still manageable at this stage. The key issue is to stop the fast growth and avoid default to trigger panic in the market," said Zhiwei Zhang, chief economist at Pinpoint Asset Management.

Posted by brightsmart > 2023-04-12 01:54 | Report Abuse

debt burdens.............lol............


debts can be wiped clean.......u jealous?

Posted by brightsmart > 2023-04-12 01:55 | Report Abuse

its left hand to right hand debts.

Posted by IDQWE001 > 2023-04-12 08:14 | Report Abuse

Many people dont know CCP depends on too much leverage on the infrastructure and property bubbles to boost up GDP. It can be done easily by dipping a hole and covering back the hole to boost up the GDP on numbers, however, it does not generate any value to the development anymore with very high leverage. How CCP local government to generate GDP, by selling lands to developers, then developers build very expensive housing to the market. It is too expensive to afford and now the 3 years lock down the property bubble burst, the property value dropped by 50%. Due to the banking system , the local banks even discharge all the payments to developers when the building complete only 50%. The sales drop the developers not able to generate cash flow to continue the building construction work and caused thousnds of abandoned buildings all over the cities. And now homebuyers cant get the completed units to stay but still to pay their housing loans. As such, homebuyers stopped paying housing loan due to many jobless or pay. The local banks are in financial crisis and caused the depositors cant withdraw their money. CCP cant rely on infrastructure construction and property to boost up their GDP anymore which normally contributed 30% of GDP.

Posted by IDQWE001 > 2023-04-12 08:15 | Report Abuse

When laughing at others please look at the mirror.

Posted by brightsmart > 2023-04-12 09:48 | Report Abuse

u jealous they got good infras and u don't?

Posted by brightsmart > 2023-04-12 09:53 | Report Abuse

ask Gordon Chang. He got 30 years record China collapse and 30 years wrong and still America chief spokesman on TV.

Posted by IDQWE001 > 2023-04-12 09:59 | Report Abuse

U may ask my workers, they cursed US bankcrupcy and collapsed for the past 20 years. till now US still the no. 1. You jeolous ?

Posted by brightsmart > 2023-04-12 10:04 | Report Abuse

your workers is right...the trend is de dollarisation. ...not american hegemony.

Posted by IDQWE001 > 2023-04-12 10:07 | Report Abuse

Just like you already wrong 20 years. still want to continue. silly

Posted by brightsmart > 2023-04-12 10:17 | Report Abuse

20 years? In 2000, there is no US China cold war...... In fact, China's only sin is China became too successful in recent years. America just want China go back to being poor.

Posted by brightsmart > 2023-04-12 10:24 | Report Abuse

Malaysians who thinks China will go back to being poor or wish China will go back to being poor is just ridiculous.

Posted by IDQWE001 > 2023-04-12 10:24 | Report Abuse

The smaller evil told that the largest evil that: I grew up now and as strong as you. Due to the current world order set by you, I wanted to challenge you and follow my way to play the game. If you don't allow me to challenge you then you are not peaceful and you are a hegemony. If you sanction me and banned me then you are really a bad guy. Q1: did the smaller evil allow the neighbouring to challenge him and amend his way to play the game ? Q2: Would it be good just let the two evils fight insteads of joining the smaller to fight the largest evil ? Q3: If the smaller evil replace the largest evil, would the smaller evil bully us ? What did the history tell us ?

Posted by IDQWE001 > 2023-04-12 10:37 | Report Abuse

60% House Price Seized by Govt: Chinese Trapped Financially, Leaving 10% of Homes Unfinished
https://youtu.be/rysnkxkzMQk

Posted by qqq47660 > 2023-04-12 11:18 | Report Abuse

American trying to push down China, restrict contain and surround China is not new....it's their mission

Posted by qqq47660 > 2023-04-12 11:19 | Report Abuse

Malaysia no need to look further...follow Anwar go to Beijing, do China business...that is best for everyone

Posted by IDQWE001 > 2023-04-12 11:19 | Report Abuse

Posted by foongsh > 3 days ago | Report Abuse

To make evil and brother story more interesting I would like to add that: The largest evil change his policy not because the rise of the smaller evil, it is the smaller evil did not follow the Terms and Conditions set by the International Bodies eg. International Labor Laws, Fair Trading Laws and respect copyrights as he thought that his factory was the only world factory could supply products to the entire world. It hardly got replacement. So the smaller evil called the Agreement and Contracts were historical documents for only reference and fun wihout any legal binding.

Posted by qqq47660 > 2023-04-12 11:20 | Report Abuse

In fact Anwar pro China trip even make it to fox news creating a panic in America

Posted by qqq47660 > 2023-04-12 11:21 | Report Abuse

Rule of law....there is no rule of law in America...there is one set of rules for them and another set for u.

Posted by qqq47660 > 2023-04-12 11:24 | Report Abuse

By end of this year, bric+ will have more than 30 members...as Xi tells Putin, things are moving fast and they are the drivers

Posted by qqq47660 > 2023-04-12 11:25 | Report Abuse

Love to see biden reaction when Mexico joins brics+

Posted by IDQWE001 > 2023-04-12 11:26 | Report Abuse

How do make the evil stronger and better ? by carrying more mega infra work ?

Definitely no, By digging a hole and covering back could generate the revenue but no contribution to the factory profits or worker skills. The evil factory should carry out R & D to venture some products that the markets could not resist, cheap and good with brands. With the current empire system how to attract genius and expertise from the world ? only rely on the smaller evil to plan and execute himself to make everything perfect ? No, if he could he would be called God and not evil.

Posted by qqq47660 > 2023-04-12 11:26 | Report Abuse

Mexico now have a president who is strong and independent from America control

Posted by qqq47660 > 2023-04-12 11:28 |

Post removed.Why?

Posted by qqq47660 > 2023-04-12 11:29 | Report Abuse

Now that is very democratic even

Posted by IDQWE001 > 2023-04-12 11:30 | Report Abuse

All the smaller factories should continue the business with the evil by using part of the evil currency. Those smaller factories should also welcome global supply chain realigments from both evils. by receiving the evil currency can't buy the products from international market due to that currency was not free exchange. Just buy something from the evil factory with their currency, and balanced reqest their currency convert to the largest evil current for international trading or foreign reserve to sustain local currency stability.

Posted by qqq47660 > 2023-04-12 11:30 | Report Abuse

The Africa China solidarity is very strong.....this gives hope to the world and I am bullish

Posted by qqq47660 > 2023-04-12 11:32 | Report Abuse

Currency? De dollarisation is real and is happening

Posted by IDQWE001 > 2023-04-12 11:32 | Report Abuse

Be an international currency firstly need to be exchanged freely without restriction secondly must have liquidity. Is the evil willing to open up freely their currency to international market ? no, there have two currency in the market namely onshore and offshore. Till now no evidence that the currency will open to international in foreseen near future.

under "1 rude 1 bell" project, the evil used up a lot of foreign reserve with debt 300% of their annual profit in less than 80 years compare to the largest evil 800% in 200 years.

Posted by qqq47660 > 2023-04-12 11:34 | Report Abuse

Africa is united in solidarity with China...this view is shared across Africa, from politicians to the masses, government leaders and opposition

Posted by IDQWE001 > 2023-04-12 11:35 | Report Abuse

Anyone would naive enough to think those smaller factories received evil currency and spent all or make it as own reserve ? the evil could not manufacture ALL Products and sold to smaller factories. The smaller factories or suppliers still need the international currencies to buy fuel, raw materials, foods, medicines etc ...

Posted by qqq47660 > 2023-04-12 11:36 | Report Abuse

There are ways to accelerate the de dollarisation process.....and it's not just about yuan but the desire of the majority of countries

Posted by IDQWE001 > 2023-04-12 11:37 | Report Abuse

Anyone would naive enough to think those smaller factories would be able to supply ALL Products or Materials that the evil needs ? What happen if the evil not enough to supply the international currency to change back his own currency to smaller factories or suppliers ? The evil factory still earn their profits more 50% from the biggest evil alliance.

Posted by qqq47660 > 2023-04-12 11:38 | Report Abuse

China has the most competent government the world has seen....the best planning and execution the world has seen

Posted by qqq47660 > 2023-04-12 11:40 | Report Abuse

China success did not fall from the sky..it's planning and execution

Posted by IDQWE001 > 2023-04-12 11:41 | Report Abuse

Evil supports always asked that why did you always bad mouth the evil.

To tell the truth considered bad mouth ?

Evil supporters answered that telling truths or facts anything about the evil were discrimination because the evil MUST be democratic, perfect, smart, peaceful and fair person.

Posted by qqq47660 > 2023-04-12 11:48 | Report Abuse

Evil? China is united, people happy and bright future....that is not the stuffs of evil....it's the people's wishes

Posted by IDQWE001 > 2023-04-12 11:51 | Report Abuse

It is your own assumption and interpretation. Be innovative and creative to tell your own story. Learned to be a good story teller.

Posted by qqq47660 > 2023-04-12 11:51 | Report Abuse

America share of China trade has drop from 25% to 12%. And still dropping. One day China trade with Africa will exceed trade with American

Posted by qqq47660 > 2023-04-12 12:02 | Report Abuse

China is building a brand new city call xiong an south of Beijing. It's the largest construction project in the world.

Posted by qqq47660 > 2023-04-12 12:05 | Report Abuse

Designed to be an ultra modern city and will serve as the model city for the world.

Posted by qqq47660 > 2023-04-12 12:09 | Report Abuse

Anwar is right. We should do business with China not call China evil

Posted by foongsh > 2023-04-12 12:18 | Report Abuse

You are very evil to interpret whom the evil is.

Posted by foongsh > 2023-04-12 12:19 | Report Abuse

Posted by IDQWE001 > 1 hour ago | Report Abuse

60% House Price Seized by Govt: Chinese Trapped Financially, Leaving 10% of Homes Unfinished
https://youtu.be/rysnkxkzMQk

Very pity.

Posted by qqq47660 > 2023-04-12 12:26 | Report Abuse

America media lies about China is not something new...it's been going on since 1949 and even before

Posted by foongsh > 2023-04-12 12:46 | Report Abuse

Posted by foongsh > 21 minutes ago | Report Abuse

Posted by IDQWE001 > 1 hour ago | Report Abuse

60% House Price Seized by Govt: Chinese Trapped Financially, Leaving 10% of Homes Unfinished
https://youtu.be/rysnkxkzMQk

Very pity.

CCP and developers are the same gang. All medium, police, legislations systems are controled by CCP, homebuyers spent all their life saving to buy an unfinished and abandoned projects. No way to complain. Pity.

Posted by brightsmart > 2023-04-12 13:00 | Report Abuse

I can understand why China wants to reunite taiwan as soon as yesterday......to prevent Taiwan telling lies.

Posted by IDQWE001 > 2023-04-12 13:04 | Report Abuse

Posted by foongsh > 14 minutes ago | Report Abuse

CCP and developers are the same gang. All medium, police, legislations systems are controled by CCP, homebuyers spent all their life saving to buy an unfinished and abandoned projects. No way to complain. Pity.

The Judges refused sustain it as a court case, bacause they all are one kind CCP kind. Unfinished property home buyer no choice have to move in because they can't afford to pay rental.. very pity

Posted by nicholas99 > 2023-04-12 13:13 | Report Abuse

because they know western manipulators are more evil. so.. they better control it.. last time their one bank almost gg. but they step in and help all the consumers. also, they know bitcoin will distrupt the flow of banks.. see western.. banks dying.

Posted by nicholas99 > 2023-04-12 13:14 | Report Abuse

see those korean.. lose money in luna.. US earn all the money.

in capitalism. only big fish win all.