How to Deal With China's Bad Debt? Sell It To Global Investors

FT: China plans securitisation to tackle banks’ bad debt burden
“How many global investors have been interested in the traditional [bad debt in China]?” asked one Hong Kong-based investor with experience buying distressed debt in Asia. “Not many . . . is a more complicated version of this going to change that soon? No.”
Needs to be attractive enough to cover a potential 30% devaluation in the renminbi. Either collapse asset prices or collapse the currency...

Speaking of bad debt: Staring down an economic reckoning in the Detroit of China
If China does have the will to order mass layoffs at state-run firms, the cuts may hit particularly hard in the northeast, home of Changchun. State-owned companies in heavy industry such as coal, steel and auto-making still account for about half of the northeast’s economic activity, while nationwide, state-backed firms contribute less than one-third of gross domestic product.

No comments:

Post a Comment