Fitch cuts China growth forecast on property woes

Fitch cuts China growth forecast on property woes

Weakness in the property market comes after a recent bout of regulatory tightening by authorities.

BEIJING (AFP) – Ratings agency Fitch on Thursday (Sept 23) cut its growth forecast for China’s economy this year citing a slowdown in the country’s colossal property sector, which is also facing headwinds over faltering real estate giant Evergrande.

China enjoyed a swift economic rebound from the Covid-19 pandemic, but strict new rules on the country’s developers have caused a deleveraging rush and helped push housing giant Evergrande to crisis point.

Financial markets have tumbled over fears that the Chinese group could collapse, leading to possible contagion in the world’s second-biggest economy and beyond.

Fitch Ratings said it expected growth to come in at 8.1 per cent this year, compared with a previous 8.4 per cent estimate, saying the “main factor weighing on the outlook is the slowdown in the property sector”.

Weakness in the property market comes after a recent bout of regulatory tightening by authorities looking to rein in surging prices and companies’ excessive borrowing.

Beijing has cracked down on developers in a bid to force them to offload debt, introducing its “three red lines” to curb leverage last year.

“Housing starts are falling and financial pressures are weighing on real-estate investment,” Fitch said in its latest report.

“Residential investment directly accounts for around 10 per cent of GDP and property activity has large spill-overs to other industries,” it added.

The property slowdown is also expected to hit emerging markets, taking a toll on global commodity demand.

On Wednesday, Chinese premier Li Keqiang called for efforts to keep the economy running steadily, state media reported.

A State Council meeting he chaired underlined measures to promote consumption, stabilise commodity prices and maintain growth of foreign investment and trade.

Anxious investors were keeping tabs on whether Evergrande makes a payment on an offshore bond due Thursday.

Global markets were roiled earlier this week by worries that the firm did not have enough cash to even service its debts, raising warnings it would default and lead to a possible collapse.

However, hopes that it could avert a disorderly debt resolution were boosted Wednesday when it announced it had reached a deal to repay interest on a separate, domestic bond that was also due Thursday.

Still, even if it does not stump up the cash to overseas bondholders, it has a 30-day grace period to find it.

Internet Explorer Channel Network
News Related

OTHER NEWS

Armenia, Russia agreed on gas price — Deputy PM

Gazprom is the sole gas supplier to Armenia Read more »

Russian media watchdog expects removal of prohibited information from Twitter — official

"Sanctions applied against them led to their removal of more than 90% of prohibited information and just a little is left to achieve complete purity," head of the regulator Andrei Lipov said Read more »

Austrian, Russian ministers plan intergovernmental commission in Vienna for October 21

On the whole, it is planned to sign three agreements Read more »

Russia plans to invest $1 bln in the Armenian economy in the near future

In particular, the investments will contribute to the creation of new high-tech jobs and facilitate exchange in various areas of the economy, culture, and infrastructure development Read more »

Russia's Internet audience reaches 124 mln people in 2021, says federal service

There are over 3,000 Internet providers, with more than 6,500 telecom operators working in this industry Read more »

Russia's IT infrastructure should be built on proven domestic solutions — authorities

According to Tatyana Matveeva, creating efficient environment for developing Russian telecom operators and Internet companies is an important area of state regulation, as well as ensuring the safety of people in terms of protecting personal data Read more »

US urges Moscow to sell gas to Europe, yet opposes Nord Stream 2, says Russian Deputy PM

Alexei Overchuk noted that he had tried to enlighten the Americans on Russia’s stance concerning the assessments of the causes for the shakeup of the European gas market, as well as its viewpoint on Nord Stream 2 Read more »

Russia is a key player for the Armenian economy — PM Pashinyan

Nikol Pashinyan stated that Armenia was interested in deeper rapprochement and mutual integration of Armenian and Russian economies, which should be based on free movement of commodities, services, labor and money Read more »

Russia's investments in US government securities in August remain at July level

In July, this figure was estimated at $4.006 bln Read more »

Greenflation feared to loom over Korean economy amid carbon neutral transition

Smoke rises from the chimneys of plants at an industrial complex in this undated photo. Yonhap By Yi Whan-woo Surging energy prices and the government’s finalized plan to drastically cut ... Read more »

Coal surges to another record in China as cold wave adds to energy crisis

Coal price hikes are likely to be seen approaching the winter heating season, and likely to continue until the fourth quarter. SINGAPORE (BLOOMBERG) – Coal futures in China surged to ... Read more »

Dollar falls to 71.25 rubles

Euro grows to 82.76 rubles Read more »

Mexico to begin packaging Sputnik V vaccine in second half of November - statement

The Mexican regulator issued a permit for the emergency use of Sputnik V in the country to protect residents from the coronavirus infection in early February Read more »

Residents' FX deposits jump in Sept. amid brisk exports

SEOUL, Oct. 19 (Yonhap) — Foreign currency deposits at banks in South Korea rose sharply in September from a month earlier as exporters increased dollar holdings, central bank data showed ... Read more »

China's property sector contracts for first time since pandemic

Output in the real-estate industry shrank 1.6 per cent from a year ago. BEIJING (BLOOMBERG) – China’s property and construction industries contracted in the third quarter for the first time ... Read more »

S. Korean shipbuilders surpass annual targets on brisk new orders

By Nam Kwang-sik SEOUL, Oct. 19 (Yonhap) — South Korea’s major shipbuilders have outpaced their annual order targets backed by brisk global new orders, company officials said Tuesday. According to ... Read more »

Supply-crunch inflation gives central banks an unfixable problem

Traders are betting the Bank of England will raise its key rate to 0.5 per cent by the end of this year. HONG KONG (BLOOMBERG) – The global economy’s supply ... Read more »

Air Seoul to resume flights to Guam in nearly 2 years

SEOUL, Oct. 19 (Yonhap) — Air Seoul Co., a South Korean low-cost carrier, said Tuesday it will resume flights to Guam in December as the country prepares to shift to ... Read more »

Xi Jinping dials back China's economic overhaul as masses feel pain

BEIJING (BLOOMBERG) – Chinese President Xi Jinping took a big gamble shaking up key industries ahead of a political gathering that could decide whether he rules the country indefinitely. Now ... Read more »

Korea faces possible 3 percent inflation

Deputy Prime Minister and Finance Minister Hong Nam-ki. Korea Times file By Lee Kyung-min Korea is expected to register inflation of over 3 percent this year, driven by soaring raw ... Read more »

Russia, US think cyber norms will decrease threats to peace, security

Russia and the US prepared the UN General Assembly draft resolution on cybersecurity, inviting all countries to join the rules of behavior in cyberspace listed in the reports of the open working group and the group of governmental experts Read more »

Singapore firms worry most about rising costs; 40% see losses this year: SCCCI survey

Sentiment on financial performance remains depressed, albeit improved from last year. SINGAPORE (THE BUSINESS TIMES) – Some 57.3 per cent of Singapore businesses surveyed saw their costs rise this year, ... Read more »

Retailers hope for sales recovery amid 'Living with COVID-19' scheme

SEOUL, Oct. 19 (Yonhap) — Beset by curfews and fewer customers amid the coronavirus pandemic, the retail industry in South Korea is now pinning hopes on a business rebound, as ... Read more »

Delhi Capitals' Rishabh Pant inks NFT deal with Rario

The NFTs would give cricket fans worldwide the opportunity to relive Pant’s explosive moments. Delhi Capitals captain and wicketkeeper Rishabh Pant signed a lucrative deal with cricket NFT platform Rario. ... Read more »

(EDITORIAL from Korea Times on Oct. 19)

Long way to goMoon and Kishida disagree on historical issues President Moon Jae-in and Japanese Prime Minister Fumio Kishida failed to narrow their differences on key issues, such as Japan’s ... Read more »

(EDITORIAL from Korea Herald on Oct. 19)

Disappointing signalsMoves by Kishida suggests improvement in Seoul-Tokyo relations is way distant New Japanese Prime Minister Fumio Kishida sent an offering to a controversial war shrine in Tokyo on Sunday, ... Read more »

(EDITORIAL from Korea JoongAng Daily on Oct. 19)

A weird investigation In the National Assembly’s audit of the Gyeonggi provincial government on Monday, opposition lawmakers vehemently attacked the prosecution for its half-baked investigation into the grave Daejang-dong land ... Read more »

Cabinet did not stop improving Russia's investment climate in pandemic - Mishustin

According to Prime Minister, the capacities of existing enterprises were expanded in several regions of the country at once Read more »

Green energy transition more relevant than ever for Russia - Mishustin

Prime Minister added that the Russian government is already actively developing a regulatory system and a financing system for launching climate projects Read more »

Yandex sees interest in driverless deliveries in Dubai — company

At the moment, the negotiations between the potential partners are underway Read more »

Novatek does not believe in emergence of gas OPEC

Last week, Saudi Arabian Energy Minister Prince offered the Russian Deputy Prime Minister to consider the possibility of cooperation on the gas market Read more »

Russian PM invited foreign investors to jubilee SPIEF in 2022

It was reported that the jubilee 25th St. Petersburg International Economic Forum would be held from June 15 to 18 Read more »

Media: Number of new market participants in China's Sanya up 65% in January-September

Sanya attracts around 24,100 businesses and 19,700 individual entrepreneurs Read more »

Russian economy's volume above pre-crisis level, PM says

It was reported that gross domestic product moved up by 4.7% over eight months of this year Read more »

European gas consumers didn't ask Novatek to increase supplies

At the moment, about 80% of the company's supplies on the spot market go to the Asia-Pacific countries, while Europe's portion is insignificant Read more »

Retail tomato prices skyrocket to Rs 93 per kg in metros as unseasonal rains damage crop

The retail price of tomatoes rose to Rs 93 per kg in metros on Monday on sluggish arrival in mandis amid reports of crop damage, owing to unseasonal rains, according ... Read more »

Russia, Guinea-Bissau to exchange business missions — Lavrov

The topics refer to cooperation in such spheres as natural resources tapping, infrastructure development, agriculture and fisheries Read more »

Putin orders to consider regular transit transportation over Northern Sea Route from 2022

The most important aspects to consider are the development of the port infrastructure, support of navigation safety and cost efficiency of transportation, and the need to support such traffic all over the year Read more »

Industrial production falls 1.3% in September as effects from Hurricane Ida linger

Damaged power lines and homes can be seen days after hurricane Ida ripped through Grand Isle, Louisiana, September 2, 2021.Leah Millis | Reuters U.S. industrial production fell 1.3% in September, ... Read more »

POSCO unit confirms takeover talks with Australian gas producer Senex

SEOUL, Oct. 18 (Yonhap) — POSCO International Corp. on Monday said it is in talks to take over Australian coal seam gas producer Senex Energy Ltd. Earlier in the day, ... Read more »