Close Menu
Nabka News
  • Home
  • News
  • Business
  • China
  • India
  • Pakistan
  • Political
  • Tech
  • Trend
  • USA
  • Sports

Subscribe to Updates

Subscribe to our newsletter and never miss our latest news

Subscribe my Newsletter for New Posts & tips Let's stay updated!

What's Hot

China’s first Airbus jet symbolizes 40 years of aviation ties-Xinhua

July 24, 2025

10 more killed in flash floods as monsoon spell intensifies across country

July 24, 2025

Europe’s wake-up call amid U.S. tariff hikes, currency pressures-Xinhua

July 24, 2025
Facebook X (Twitter) Instagram
  • Home
  • About NabkaNews
  • Advertise with NabkaNews
  • DMCA Policy
  • Privacy Policy
  • Terms of Use
  • Contact us
Facebook X (Twitter) Instagram Pinterest Vimeo
Nabka News
  • Home
  • News
  • Business
  • China
  • India
  • Pakistan
  • Political
  • Tech
  • Trend
  • USA
  • Sports
Nabka News
Home » China’s ‘trillion-dollar time bomb’ puts global markets at risk: U.S. House of Representatives
China

China’s ‘trillion-dollar time bomb’ puts global markets at risk: U.S. House of Representatives

i2wtcBy i2wtcJune 26, 2024No Comments3 Mins Read
Share Facebook Twitter Pinterest LinkedIn Tumblr Email WhatsApp Copy Link
Follow Us
Google News Flipboard Threads
Share
Facebook Twitter LinkedIn Pinterest Email Copy Link


Ratings agencies S&P Global and Moody’s came under fire at a U.S. congressional hearing on Wednesday for failing to reflect the risk of a “multitrillion-dollar time bomb” that China’s local government financing methods pose to global financial markets.

Rep. Katie Porter, D-Calif., grilled witnesses at a House Oversight Committee hearing called by Republicans on the committee, including former World Bank chief Eric Bethel in Washington. China’s Real Estate Market How has the economic downturn affected domestic LGFVs?

The companies borrow money on behalf of states and municipalities to pay for roads, ports and other infrastructure projects, using leases on land controlled by government authorities as collateral, Porter said.

This is a risky proposition given that China’s property prices are in a steep decline, she added.

A residential building in Shanghai on Monday. China’s financial center has eased price caps on new homes, a strategy the government used to curb real estate bubbles when prices were soaring. Photo: Bloomberg
Porter said the value of properties built on leased land had fallen and the situation The 2007-2008 global financial crisisThis began with a collapse in the value of debt backed by subprime mortgages and other risky assets.

“A series of long-term city leases expiring over the next five years will create an oversupply and reduce lease values,” he said. “That will cause the bond market to churn.”

“”ah, Chinese Economy If you think, “Maybe things are going to get worse… that might be good news for us,” it’s not.

“If the Chinese economy collapses, the impact will ripple around the world, just as it did when our housing market, propped up by bad debt, collapsed.”

China’s housing prices The sharpest decline Official data showed China’s home prices in May hit their highest level in nearly a decade, with new home prices in 70 cities down 0.71% from April and second-hand home prices down 1% from the previous month.

Additionally, new home sales by the nation’s top 100 developers fell 33.6% in May from a year earlier.

Mary Kissel, former adviser to US Secretary of State Mike Pompeo, Donald Trump The administration’s top official, Michael Porter, praised Porter’s analysis, saying it was “the first time Congress has dug this deep.”
“You mentioned the rating agencies and the triple-A rating. [that they give to Chinese debt]said Mr. Kissel, turning to Mr. Porter.

“Congress can break up the S&P-Moody’s duopoly and force American investors to conduct their own due diligence and not outsource due diligence to rating agencies and rating companies,” Kissel testified.

After praising Porter’s “deep insight into the current state of the Chinese economy,” Bethel said: “I think we should recognise that there is a time bomb because a lot of these bonds are being sold globally and overseas.”

Global investment manager Pimco estimated last year that China’s LGFV debt had quadrupled to 55 trillion yuan. [US$7.6 trillion] It is expected to increase from 13.5 trillion yuan in 2012 to 13.5 trillion yuan in 2022.

China’s real estate data is dismal despite wide-ranging measures by the Beijing government to address problems in the country’s struggling property sector.

This includes removing the floor on mortgage interest rates nationwide and setting aside funds for local governments and state-owned enterprises to help them deal with excess housing inventory.

The firm said homebuyer confidence remains weak and it is concerned that new market stimulus measures, especially in lower-income cities, will not sufficiently revive demand.

Renyuan Zhang of S&P Global (China) Ratings said China’s property sales are expected to fall 15% year-on-year in the second half of this year, a downward revision from a forecast of a 5% decline at the end of 2023.



Source link

Share. Facebook Twitter Pinterest LinkedIn Tumblr Email WhatsApp Copy Link
i2wtc
  • Website

Related Posts

China

China’s first Airbus jet symbolizes 40 years of aviation ties-Xinhua

July 24, 2025
China

Europe’s wake-up call amid U.S. tariff hikes, currency pressures-Xinhua

July 24, 2025
China

Inter-Civilizational Dialogue Among SCO Countries 2025 held in Tianjin-Xinhua

July 24, 2025
China

Hainan Free Trade Port to officially launch island-wide independent customs operation-Xinhua

July 23, 2025
China

China’s Wing Loong UAV completes mission for typhoon monitoring-Xinhua

July 23, 2025
China

Traditional handicrafts of Tibetan carpet weaving inject momentum into rural revitalization in NW China-Xinhua

July 23, 2025
Add A Comment
Leave A Reply Cancel Reply

Top Posts

China’s first Airbus jet symbolizes 40 years of aviation ties-Xinhua

July 24, 2025

House Republicans unveil aid bill for Israel, Ukraine ahead of weekend House vote

April 17, 2024

Prime Minister Johnson presses forward with Ukraine aid bill despite pressure from hardliners

April 17, 2024

Justin Verlander makes season debut against Nationals

April 17, 2024
Don't Miss

Trump says China’s Xi ‘hard to make a deal with’ amid trade dispute | Donald Trump News

By i2wtcJune 4, 20250

Growing strains in US-China relations over implementation of agreement to roll back tariffs and trade…

Donald Trump’s 50% steel and aluminium tariffs take effect | Business and Economy News

June 4, 2025

The Take: Why is Trump cracking down on Chinese students? | Education News

June 4, 2025

Chinese couple charged with smuggling toxic fungus into US | Science and Technology News

June 4, 2025

Subscribe to Updates

Subscribe to our newsletter and never miss our latest news

Subscribe my Newsletter for New Posts & tips Let's stay updated!

About Us
About Us

Welcome to NabkaNews, your go-to source for the latest updates and insights on technology, business, and news from around the world, with a focus on the USA, Pakistan, and India.

At NabkaNews, we understand the importance of staying informed in today’s fast-paced world. Our mission is to provide you with accurate, relevant, and engaging content that keeps you up-to-date with the latest developments in technology, business trends, and news events.

Facebook X (Twitter) Pinterest YouTube WhatsApp
Our Picks

China’s first Airbus jet symbolizes 40 years of aviation ties-Xinhua

July 24, 2025

10 more killed in flash floods as monsoon spell intensifies across country

July 24, 2025

Europe’s wake-up call amid U.S. tariff hikes, currency pressures-Xinhua

July 24, 2025
Most Popular

Global defense officials meet in Singapore amid tensions between China and the U.S.

May 31, 2024

China’s new India envoy urges neighbours to ‘get along’ amid talk of Xi-Modi meeting, border troop buildup

June 1, 2024

China claims Britain’s MI6 framed two Chinese government officials as spies

June 3, 2024
© 2025 nabkanews. Designed by nabkanews.
  • Home
  • About NabkaNews
  • Advertise with NabkaNews
  • DMCA Policy
  • Privacy Policy
  • Terms of Use
  • Contact us

Type above and press Enter to search. Press Esc to cancel.