China’s economic engine appears to
be contracting, or at least slowing. Chinese PMI fell to 48.1 in March,
an eight-month low, and the index has been below 50 since January. A
PMI below 50 indiates a contraction in the manufacturing sector.
Last year Suntech Power, a Chinese solar energy company, defaulted on a $541 million bond followed by Shanghai Chaori Solar failing to make a $14.7 million interest payment
on March 7. On March 18, Zhejiang Xingrun Real Estate Company defaulted
on a $400 million loan. China is also taking large (and potentially
unsustainable) debts in emerging markets prompting investor concern.
China’s hard currency debt exposure was $223 billion at the end of 2013,
according to Nomura Securities.
No comments:
Post a Comment