Chinese local government entities have carried the mantle of cornerstone investors in first-time stock offerings in Hong Kong in the past two years as foreign investors shun deals. Their outsize role could work against the city’s capital market, market experts say.
China could face a third wave of corporate bond defaults, induced by high financing costs, slow economic growth and tighter government policies, S&P analysts said. Local government financing vehicles may be the weakest link.
Under a new initiative called ‘old-for-new’, local authorities are helping prospective homebuyers sell their old homes, while offering them partial subsidies to buy new homes.
China's financial system is facing a crisis as its largest real estate developer and a major wealth manager are on the brink of collapse. Regional governments are also feeling the strain as land sales, a major source of income, decline.