(2) “Chinese property developer Sunac agreed to invest 15 billion yuan ($2.21 billion), including 9 billion yuan into LeEco’s non-listed entities. …. Leshi had income receivables of 9.5 billion yuan as of the first quarter, representing 28.4 percent of its total assets of 33.6 billion yuan, according to its financial report. Chief Financial Officer Zhang Wei said the company aims to lower that ratio to below 20 percent and reduce the receivable account by around 3 billion yuan.”
(3) “S&P puts Sunac China on credit watch with negative implications”
(4) “… consider Dalian Wanda Group Co., which has also come under official scrutiny of late. It recently sold a $9 billion piece of its empire to Sunac China Holdings Ltd. to pay down debt after an ambitious acquisition spree. But the deal had an unusual twist: It was funded with a loan from Wanda-the-seller to Wanda-the-buyer. Wanda is actually securing a loan to Sunac to buy the assets from Wanda.”
(5) “Let’s begin with some grade A gibberish on Xi the free market zealot economic reformer …” – a tweet by Chris Balding and he was referring to this article Arthur Kroeber, published in 2013:
(6) Even this observation by Arthur Kroeber in the link above has been belied in reality:
“In short, the vision seems to be to move China much further toward an economy where the government plays a regulatory, rather than a directly interventionist role.”
For example, see this header and sub-header in an article from FT:
“China’s overseas acquisitions recover from doldrums – State-owned companies stage comeback while private peers remain in the cold.”
(7) “The new Chinese owner of Darwin Port is heavily indebted and has struggled to make interest payments on money borrowed to buy the lease, raising doubts over promises to upgrade the port and fund a new $200 million hotel on a nearby site.”
(8) “OTTAWA — The Trudeau government should spend less time bowing down to Canadian journalists preoccupied with human rights and get on with negotiating an important free trade agreement with China, says the country’s ambassador.
Chinese ambassador Lu Shaye blamed the Canadian media for disseminating a negative portrait of his country that depicts it as an abuser of human rights and lacking democracy.”
(9) “China claims territories of 23 countries, even though it only has borders with 14. The total area of China’s claims on other countries exceeds the size of modern China itself, but Beijing refuses to budge on its claims.”
(10) “Chinese conglomerate HNA Group Co. is copying the financing strategies of hedge funds and private-equity firms as it pursues its quest to become one of the world’s largest companies. HNA, a sprawling group that operates in everything from airlines to hotels, has been on an overseas acquisition spree. Increasingly, it is financing those deals with loans backed by company stakes it has purchased. The conglomerate has also entered into complex derivatives with U.S. and European banks that are helping fund its investments outside China.”
(11) A story in NYT on the web of family ties behind HNA:
(12) Bank of America Corp. has told investment bankers to stop working on transactions with HNA Group Co. for now amid growing concerns about the acquisitive Chinese conglomerate’s debt levels and ownership structure, according to people familiar with the matter.
The U.S. investment bank joins other Wall Street firms, including Citigroup Inc. and Morgan Stanley, that are largely steering clear of advising and financing the group on deals because they are unable to get internal approvals from “know your customer” committees, the people said, asking not to be identified because the information is private.
(13) “a Financial Times investigation has found that China’s high-speed rail ambitions are running off the tracks. Far from blazing a trail for One Belt, One Road, several of the projects have been abandoned or postponed. Such failed schemes, and some that are under way, have stoked suspicion, public animosity and mountains of debt in countries that Beijing had hoped to woo.”
(14) “Chinese banks have been warned by regulators against lending to Dalian Wanda as the serial acquirer comes under official scrutiny following a half-decade overseas dealmaking binge. Regulators instructed banks to restrict exposure to the property-to-movies conglomerate in a meeting on June 20, according to notes of the meeting that were seen by the Financial Times. A Wanda spokesperson declined to comment. ….Wanda also has come under investor scrutiny following the unexpected sale last week of $9.3bn of hotel and tourism assets to rival developer Sunac.”
(15) “The Senate Armed Services Committee approved a major change in U.S. policy toward Taiwan as part of an annual defense-policy measure, voting to allow regular stops by U.S. naval vessels in a move that is likely to anger China. In a bipartisan 21-6 vote, the panel approved re-establishing “regular ports of call by the U.S. Navy at Kaohsiung or any other suitable ports in Taiwan and permits U.S. Pacific Command to receive ports of call by Taiwan.” If ratified by Congress, the new policy would roll back nearly 40 years of U.S. deference to China under the “One China” policy, in which Washington grants diplomatic recognition to China, but not to Taiwan.”
(16) “China said on Monday it had lodged a stern complaint with the United States after the U.S. House of Representatives passed its version of a big annual defense bill that would expand exchanges with self-ruled Taiwan.”
(17) “US-China economic dialogue ends in a tiff. Press conferences cancelled; no joint statement issued”
(18) “A flood of credit to the household sector in June shows the limits of the government’s campaign to rein in credit, as well as the grip that rising house prices have on Chinese consumers. We expect mortgage lending to cool in the second half as the authorities try to control financial risk. However, this policy stance will be tempered by the importance of the housing market to China’s economic growth.”
…………… Official rhetoric indicates the authorities are not willing to loosen up on the housing market. The recently concluded National Financial Work Conference identified real estate bubbles as one of seven financial system risks to be prevented.
On the other hand, the PBoC has noted low levels of debt on household balance sheets and identified the importance of mortgage loans in supporting industrial activity. The authorities will be wary of going too far with tightening given the political imperative to maintain stability and deliver on growth. For this, they need a robust housing market.”
(19) “China is creating roadblocks for U.S. auto makers and tech companies to bringing self-driving cars to the world’s largest auto market. Citing national security concerns, China is limiting the amount of mapping that can be done by foreign companies, as General Motors Co. , Ford Motor Co., Alphabet Inc. and Apple Inc. rush to develop self-driving cars or the software behind them. High-definition maps are crucial for autonomous cars to help them discern their exact location, navigate tricky intersections and avoid fixed objects such as buildings.”
(20) “According to Deutsche Bank , VIP gambling revenue in Macau and third-tier city property prices have a correlation of 0.74, where a correlation of one indicates they move in lockstep. … Banks have to report cross-border transfers above 200,000 yuan ($30,000) and ATMs with facial recognition are popping up in the city. The city’s biggest junket operator, Suncity, which brings big-stakes gamblers to Macau and lends them money, sent messages to its customers last week warning about the risks of moving money across the border. The more the high rollers keep coming, the more likely Macau is to become the next part of the economy to be squeezed.”
(21) This blog post by Chris Balding is worth a careful read: ‘Is the PBOC Fudging FX Reserve Numbers?’
(22) “A hastily arranged meeting of party officials on Saturday in the inland city of Chongqing announced that Sun Zhengcai, the city’s top official, was being replaced and was being investigated, a person familiar with the matter said. A second person corroborated the investigation. No further details of the investigation were given, the people said. State media announced Mr. Sun’s removal Saturday but didn’t provide a reason or mention an investigation. Replacing Mr. Sun as Chongqing’s party secretary is Chen Min’er, who was party chief for the southern province of Guizhou, state media reported….
According to a state-media report, Mr. Chen told attendees that “firmly protecting General Secretary Xi Jinping’s core status” should be their top political priority…..
Mr. Sun, named Chongqing party chief in late 2012, was tasked with cleaning up Mr. Bo’s legacy. His efforts were recently deemed inadequate by the party’s disciplinary agency, which in February criticized Chongqing authorities for failing to eradicate Mr. Bo’s “lingering pernicious influence” and curb corruption in local bureaucracy and business……
….. Some party insiders have said Mr. Xi may also be trying to block promotion of anyone who could be seen as a potential successor—a move that would enhance his authority and boost his chances of remaining in office after his second term expires in 2022.”
My comment: I suppose any resemblance to the recent Wall Street Journal story on how Prince Nayef was deposed in Saudi Arabia is purely coincidental)
(23) “The humour has been lost on China’s government, which is wary of any discussion of its leadership in the run-up to this autumn’s 19th National Congress of the Communist party. The once-in-five-years event will bring a potentially tricky handover of power at the top of the party.”
(24) “To understand the ruthless authoritarian logic behind Beijing’s treatment of Liu is not to excuse or condone it. But it is important for people outside China to understand it, especially as China becomes more prominent and active on the world stage.
This is how Liu himself put it in 2006: “Although the regime of the post-Mao era is still a dictatorship, it is no longer fanatical but rather a rational dictatorship that has become increasingly adept at calculating its interests.”
In calculating those interests, the regime has decided that it was safer to turn Liu into a martyr than to allow his ideas to spread unchallenged. This conclusion is probably correct in the short term.”
(Source: https://www.ft.com/content/bd978dc8-6c59-11e7-b9c7-15af748b60d0 – Jamil Anderlini on the death of Liu Xiabo)
(25) Bilingual tribute from the Taiwanese President:
(26) Carrie Grace in BBC: ‘Liu Xiaobo: The man China couldn’t erase’
“To make it hard for family and friends to visit, he was jailed nearly 400 miles from home. His wife Liu Xia was shrouded in surveillance so suffocating that she gradually fell victim to mental and physical ill health.”
(27) An excellent tweet from a Hong Kong resident Ilaria Maria Sala. She was born in Italy, grew up in Bologna and Florence, and now lives in Hong Kong, where she writes about China. She studied at the School of Oriental and African Studies, Beijing Normal University, and Beijing University. She is a winner of the Bruce Chatwin Award for travel literature for Il Dio dell’Asia: Religione e Politica in Oriente: Un Reportage, a book of travel features about religion.)
“I’m no fan of Trump. But we’ve been so busy looking at ways to shame him that we even wrote China was now the “grown up” “responsible” one.”
(28) Her tribute to Liu Xiabo:
“Far from being the personal sorrow of a friend taken so gravely ill after years of hardship, this is China’s sorrow, too. It has an obsession with control so strong that it is rendered incapable of celebrating its most inspiring people, and of cherishing the wealth that sparks from free minds, free thinking, and diversity.”
(29) A searing tweet by Chris Balding:
One Nobel Peace winner who died for his win hasn’t even received words from a man who didn’t deserve his @BarackObama
Who is Sushil Aaron and why is this post dedicated to him? See here for clues.
[postscript: The Indian Censor Board is embarrassing itself and the Indian government. See here.]