7/13/2021 Financial News: Communist China’s Agricultural Imports From U.S. Rose 120.8%; Chinese Bond Defaults Reached Nearly 100bln Yuan In First Half Of 2021

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1.Communist China’s Imports of Agricultural Products from the US Rose 120.8%

It was announced at a press conference held by the State Information Office on the 13th that the total value of bilateral trade in goods between Communist China and the US reached 2.21 trillion yuan in the first half of this year, a year-on-year increase of 34.6%.

Communist China’s exports to the US were 1.64 trillion yuan, an increase of 31.7%. Specifically, the export of mechanical and electrical products was 1.01 trillion yuan, an increase of 34.2%, and the export of labor-intensive products was 372.2 billion yuan, an increase of 24.1%. Communist China imported 570.65 billion yuan from the US, an increase of 43.9%. It is worth noting that the import of mechanical and electrical products increased 13.4% to 238.86 billion yuan. The import of agricultural products surged 120.8% to 136.01 billion yuan. Among them, soybean imports were 48.895 million tons, an increase of 8.7%; corn imports reached 15.302 million tons, an increase of 318.5 percent; wheat imports rose 60.1% to 5.368 million tons.

2.Chinese Bond Defaults Reached Nearly 100 Billion Yuan in First Half of 2021

According to Wind statistics, as of June 30, this year’s bond defaults have reached 98.573 billion yuan, far exceeding the level from a year ago. In the same period last year, the amount was 72.995 billion yuan. Among them, the overdue principal of the bonds was 91.338 billion yuan, and the overdue interest was 7.235 billion yuan. In addition, the ratio of the accumulated principal repayment of defaulted bonds to the total outstanding balance of defaulted bonds dropped from 79.37% at the end of 2014 to 6.87% at the end of June in 2021.

In the first half of 2021, the balance of bond defaults of local state-owned enterprises amounted to 36.411 billion yuan, about 79% of the default amount for the entire 2020. In terms of industry distribution, in the first half of this year, most of bond defaults occurred in industries such as real estate, air transportation, construction and engineering. Among them, the scale of bond defaults in the real estate industry was the highest, reaching 19.192 billion yuan.

3.RMB Rebounds from a More Than 2-Month Low

(Reuters) – RMB against the dollar bounce back on Monday after Communist China’s central bank reduced reserve ratios, releasing around 1 trillion yuan ($154.5 billion) in long-term liquidity, to stimulate the economy. Prior to the market opening, the PBOC set the midpoint rate at 6.4785 per dollar, 30 pips weaker than the previous fix of 6.4755 and a more than two-week low. But the onshore yuan opened at 6.4760 per dollar and reached 6.4743 at midday, 48 pips stronger than the previous late session close. On Monday morning, CCP China’s primary money rates fell, but treasury futures rose.

4.Languang Development’s Overdue Debt Exceeds 4.5 Billion Yuan

Sichuan Languang Development Co., Ltd. announced that as of July 12, the company’s overdue debt including principal and interest totaled 4.544 billion yuan. Languang and its subsidiaries’ most recent debt default on bank loans, trust loans, debt financial instruments, and other forms of debt amounted to 2.06 billion yuan.

The announcement explained that due to the impact of the macroeconomic environment, industry environment, and financing environment, since the end of 2020, the company’s refinancing in the public market has run into trouble. With strained operating cash flow and debt accelerations, the company has failed to repay some of its debts as scheduled. It was also stated that the company is making a comprehensive plan to resolve its debt problems with support from local authorities and coordination of financial regulatory institutions.

5.China Northern Rare Earth’s Cumulative Increase of 57% in 8 Days

China Northern Rare Earth recently issued a stock trading risk warning announcement. As of July 12, the company has a static P/E ratio of 142.6 times and a dynamic P/E ratio of 38.29 times, both of which are relatively high among listed companies in the rare earth industry and may be at risk of speculation.

The company has reached limit-up for two consecutive trading days, and the cumulative increase in the first 8 trading days in July has reached 57%. The quarterly report shows that China Northern Rare Earth achieved a net profit of 770 million yuan in the first quarter, a sharp increase of 435% year-on-year. On July 8, the Ministry of Industry and Information Technology emphasized its focus on ensuring the safety and stability of the industrial chain and supply chain and promoting the implementation of the “Rare Earth Regulations” as soon as possible.

6.Resignation of Suning.com Founder Zhang Jindong as Chairman

Zhang Jindong, the billionaire founder of Suning Holdings, resigned as chairman of the e-commerce arm Suning.com Co. Ltd. after the debt-ridden company received a $1.36 billion bailout from state funds and Alibaba Group. Zhang will not hold any duties or rights as a board member but will continue acting as the legal representative until a replacement is named, the company announced. Ren Jun, a board member, will perform the chairmen duties temporarily. The changes were reviewed by the board of directors but are still subject to shareholder approval July 29. Zhang Jindong nominated his son Steven Zhang Kangyang for the board.

7.Chinese Bank Complaints Data in the First Quarter Released

On July 12, Communist China’s Banking and Insurance Regulatory Commission reported statistics of consumer complaints in the first quarter of 2021. In the first quarter of 2021, the commission and its agencies received and forwarded 78,414 consumer complaints against the banking industry, an increase of 2.9% from the previous quarter. Among them, 25,091 cases involved large state-owned commercial banks, 3.0% decreased from the previous month, accounting for 32.0% of the total number of complaints. 32,599 complaints were about joint-stock commercial banks, 2.4% higher than the previous month, accounting for 41.6% of all the complaints.

The report shows that the number of complaints against Industrial and Commercial Bank of China and Agricultural Bank of China ranked the highest among the large state-owned commercial banks in the first quarter. China Merchants Bank, Shanghai Pudong Development Bank, and China CITIC Bank had the most complaints among the joint-stock commercial banks.

8.Oil Prices Increase Again in Communist China

According to the current refined oil pricing mechanism, starting from 24:00 on July 12, domestic gasoline and diesel prices will increase by 70 yuan and 65 yuan per ton respectively. Related price linkage mechanisms and subsidy policies are implemented in accordance with current regulations. The three major companies, PetroChina, Sinopec, and CNOOC, must organize the production and dispatch of refined oil products to ensure stable supply in the market and strictly implement the national pricing policy. Relevant departments in all regions must increase market monitoring and inspection, strictly investigate and punish behaviors not following the pricing policy, and maintain market order.

By【G Translators- Financial Team】
Author: Kate

Disclaimer: This article only represents the author’s view. Gnews is not responsible for any legal risks.

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