03-03-2016, 11:00 PM
Some good and some bad news out of China. The first is very good, China really needs to deal with its overcapacity and debt accumulation in many state owned heavy industries. But there are still plenty of worrying signs..
The Chinese government will lay off 5 million to 6 million workers over the next few years in an effort to free up cash at massive, indebted companies in the country. Its coal and steel sectors alone will fire 1.8 million people.
Why China is worried about job losses - Business Insider
The outlook for China’s credit ratings was cut to negative by Moody’s Investor Service as reserves decline and government debt rises.
China Credit Outlook Cut to Negative From Stable by Moody's - Bloomberg Business
The risk of a liquidity crisis in China’s bank-run wealth management product (WMP) space, the biggest “deposit” base of China’s shadow bank, is growing at an alarming rate according to Bank of America Merrill Lynch’s February 29 report on the sector.
BofA says China's wealth management products could be systemic - Business Insider
According to figures from the Annual Report of the Bank WMP Industry, the total value of assets in WMP products increased 56% year-on-year during 2015 to a total of 23.5 trillion yuan (USD3.59 trillion). Last year’s growth even exceeded that of 2014 which had already set a high bar. In 2014, the balance of WMPs grew from 10.2 trillion yuan to 15 trillion yuan, up 47.25% year-on-year.
BofA says China's wealth management products could be systemic - Business Insider