China's economic rebound from the coronavirus pandemic is stalling as President Xi Jinping's government cracks down on surging corporate debt.
For a decade, the ruling Communist Party has talked about shifting to economy based on spending by 1.4 billion consumers instead of on building factories and apartments. But with each slowdown, Beijing fell back on pepping up growth with more construction and borrowing.
China became the world's factory, but the bigger power driving its economic boom was a construction frenzy that took off in the late 1990s. Developers and local governments poured borrowed money into blanketing the country with new apartments, office towers, shopping malls, bridges and railways. Beijing wants to make sure families receive apartments sold to them by Evergrande before they were built, as is common in China, economists say. But they say it is trying to avoid sending the wrong message by bailing out the company.China revived from the coronavirus pandemic earlier than the United States, Europe or Japan, but but that rebound quickly flattened out.
This quarter's growth might fall as low as 3% over a year ago, according to Nomura. Bank of America cut its full-year forecast from 8% to 7.7%, which still would be among the world's strongest. It slashed next year's outlook from 5.3% to just 4%. Regulators tightened control over use of debt by real estate developers last year. Hundreds already had gone bankrupt following other restrictions imposed since 2017.
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Freeland downplays absence of leaders from China, Russia at G20 summitCanada's deputy prime minister says the absence of leaders from China and Russia at the G20 summit in Italy this weekend isn't ideal, but isn't commenting on the impact that may have on tough climate talks.
Read more »
China says U.S. COVID-19 origins report is without credibilityDeclassified intelligence report said both natural origin and lab leak were plausible hypotheses, but truth may never be known
Read more »
Evergrande debt crisis, China’s property woes put prestige global projects in playEvergrande Group’s struggles have dominated the crisis, but the risk to multi-trillion dollar global property markets stems from some of its rivals that competed to build ever taller and grander skyscrapers
Read more »
G20 summit opens with call for more COVID-19 vaccines for poor countriesG20 leaders focused on global health, economy on first day of sessions
Read more »
End of quantitative easing shadows Liberals' consultation on managing federal debtThe Bank of Canada's move to end its pandemic-driven purchases of government bonds to stimulate the economy, and warnings of rate hikes sooner than previously expected, has coloured federal efforts to craft an annual plan to manage the debt.
Read more »