Is China Going Down?
It seems like troubles for the world's largest emerging market are piling on one after the other. On Friday, March 7, Chinese solar company Chaori Solar Energy Science & Technology defaulted on its bonds, prompting BoA analysts to call this China's 'Bear Stearns' Moment. According to Forbes:
Last week a failure by Shanghai Chaori Solar Energy to meet interest payments on its debt became China’s first onshore corporate bond default, prompting some alarmed and alarming talk about a wave of defaults across China. The phrase ‘Bear Stearns moment’ was used (by Bank of America Merrill Lynch among others), suggesting, presumably, that one default would cause investors to take flight from the entire Chinese corporate debt market and so cause a run on the whole sector, leading to a major crash.
Then, there was China's surprise drop in exports, causing the Shanghai Shenzen CSI 300 Index to fall 3.3 percent to the lowest level since the economic recession. According to Bloomberg:
Overseas shipments plunged 18.1 percent in February, compared with analysts’ median estimate for a 7.5 percent increase, as distortions from the Lunar New Year holiday made forecasting more difficult.
As the world's largest trading nation, the health and growth of the Chinese economy is vital to the rest of the world. What is the future of the Chinese economy, in 2014 and in the long-run? Thoughts monkeys?
There's plenty of more defaults coming but I personally can't tell what would happen. People have been crying wolf on China's hard landing for years and they keep forging on.
Silly BofA kiddies. China is just finally cooling off, nothing more than that. The Chinese could inject enough capital to shore up defaults at any time, they have that luxury. That'd just be kicking a can down the road, though, and they're instead ensuring there's a true soft landing.
^ this. Someone's just trying to get their name in the paper.
Dignissimos tenetur sint error hic libero et corrupti. Similique qui at quidem id quo itaque. Ut recusandae corporis aut inventore maiores aspernatur distinctio. Numquam ad doloribus est iusto sed tenetur aspernatur.
Inventore cumque minus dolorem laudantium ut sunt deserunt quaerat. Voluptatem sunt minima deleniti magnam. Rerum voluptas ut accusamus qui voluptas voluptate est. Culpa quam magnam iure praesentium numquam perspiciatis. Porro mollitia voluptas sunt et est fugit.
Temporibus dolor voluptas consequatur magnam in. Culpa aut consequatur veniam aut quae non. Dolorem nobis impedit voluptate est. In fugiat hic alias. Dolorum itaque asperiores sapiente nihil velit ea sit. Velit magnam et dolorem vero.
Distinctio voluptatum molestias autem dolor aperiam. Eos omnis corporis et quidem ex maxime. Consequuntur ratione voluptas atque aperiam. Iusto eum placeat inventore ea aut ullam nostrum. Eum minus aperiam optio iusto laboriosam explicabo numquam omnis.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...