u****d
发帖数: 2578 | 1 当然这次又不是真的。狼真来的时候，一定是打枪的不要，悄悄地进村。A 股今年夏天
要大涨。
China Failure to Grow With $1 Trillion Is Warning to Li: Economy
By Bloomberg News - May 30, 2013 China’s economy is proving less responsive
to credit, escalating pressure on Premier Li Keqiang to strengthen the role
of private enterprise.
The government’s broadest measure of credit rose 58 percent to a record 6.
16 trillion yuan ($1 trillion) in January-to-March, when gross domestic
product gained 7.7 percent, compared with 8.1 percent a year earlier. Each $
1 in credit firepower added the equivalent of 17 cents in GDP, down from 29
cents last year and 83 cents in 2007, when global money markets began to
freeze, according to data compiled by Bloomberg.
The diminishing returns to lending heighten focus on the need for what the
International Monetary Fund said yesterday are “decisive” policy changes
in the world’s second-largest economy. Without a refocus away from state-
approved projects, Li and President Xi Jinping risk overseeing both a
further slowdown in growth and an increase in non-performing loans.
“Less efficient and more highly leveraged borrowers have been kept afloat,
tying up credit that could be used to generate more growth,” said David
Loevinger, former senior coordinator for China affairs at the U.S. Treasury
Department. “To boost growth, China needs to channel more financing to its
private enterprises, which are both more profitable and less leveraged than
their state-owned counterparts.”
State enterprises have seen their return on equity fall to 5.9 percent last
year from 10.2 percent in 2010, according to the Ministry of Finance. The
biggest concern from China’s credit surge is the money going to companies
and state-run enterprises whose performance is deteriorating, Francis Cheung
, head of China-Hong Kong strategy at CLSA Asia-Pacific Markets, wrote in a
May 9 report.
Bond Market
Signals from China’s bond market, which has expanded 39 percent so far this
year compared with the same period in 2012, indicate businesses are
struggling to improve profitability even with greater access to credit.
Borrowing in the debt market by the biggest Chinese companies is more than
five times a measure of their operating earnings, twice the leverage ratio
in 2007, according to data compiled by Bloomberg. State-owned enterprises in
energy and power production are among the biggest borrowers, including
China National Petroleum Corp., the nation’s largest oil producer, and
China State Grid Corp., the country’s largest power distributor.
Among 102 non-financial companies in the MSCI China Index, total debt over
earnings before interest, taxes, depreciation and amortization rose to 5.74
times based on the latest filings through May 28, from 2.49 times in 2007.
Solar Loans
One example of what Loevinger, now an emerging-markets analyst in Los
Angeles at TCW Group Inc., called “inefficient and leveraged borrowers,”
may be LDK Solar Co. (LDK), a maker of solar panels. The company, which cut
solar-cell production capacity by 89 percent last year, said in April it’s
in the process of getting a new loan facility of about 2 billion yuan.
With debt of $3.1 billion, seven straight quarterly losses and cash at a
three-year low, LDK needs access to funds “to get through this very
challenging time,” Chief Financial Officer Jack Lai said on an April 18
conference call. The announcement came after larger competitor Suntech Power
Holdings Co. (STP)’s biggest unit was forced into bankruptcy in March.
The 2014 yuan bonds of LDK, which failed to fully repay $23.8 million of
convertible notes in April, slid to a seven-month low of 34 yuan per 100
yuan face value earlier this month.
Reduce Role
Since taking office in March, Li has pledged to reduce government
interference and boost the role of private companies. He said March 17 that
cutting the government’s power amounted to a “self-imposed revolution”
and earlier this month signaled in a speech broadcast to government
officials around the nation that he would prefer relying on “market
mechanisms” for growth rather than stimulus or direct government investment
.
China’s leaders are already experimenting with some changes, including to
the household-registration system that hampers urbanization. Other reforms,
such as to land rights and income distribution, may be decided later this
year at a Communist Party forum.
Xi and Li have signaled they’re willing to tolerate slower growth if it’s
more sustainable in the longer run and provides a better quality of life for
the nation’s 1.35 billion people. Xi said May 24 that the environment won
’t be sacrificed to ensure short-term economic expansion, as the government
faces rising public discontent over pollution and food safety issues.
Annual Pace
Li said this week that 7 percent average annual growth is needed this decade
as the country seeks to double per-capita income. That’s lower than the 7.
5 percent target the government set in March for this year.
Forty-one percent of respondents in a Bloomberg global poll of investors
this month saw China’s average growth rate falling to 6 percent to 7
percent over the next five years, while 18 percent said it will slump to
less than 6 percent. Even with an 81 percent increase in credit in April
from a year earlier, manufacturing contracted in May for the first time in
seven months, according to the preliminary reading of a Purchasing Managers
’ Index from HSBC Holdings Plc and Markit Economics.
The benchmark Shanghai Composite Index fell 0.3 percent at the close,
extending the drop to 4.8 percent since this year’s high on Feb. 6.
David Lipton, the IMF’s first deputy managing director, warned yesterday
that rapid credit growth “raises questions about the quality of the
investment and the impact that may have on repayment capacity” for
companies and local governments. China’s leaders have assured the IMF that
reining in credit expansion is a priority, Lipton told reporters in Beijing.
Restrain Spending
China had snapped seven quarters of decelerating growth in the fourth
quarter only to slow again in the first three months of 2013. Europe’s debt
crisis is curbing shipments abroad, manufacturing gains are weakening and a
government anti-extravagance campaign has restrained restaurant and retail
sales.
“Such stalling is extremely rare in recent macroeconomic cycles,” Stephen
Green, head of Greater China research at Standard Chartered Plc in Hong Kong
, wrote in a May 10 note. “Once China’s growth starts accelerating, it
usually continues.”
Green sees the injection of credit fueling an uptick in output toward the
end of this quarter and next, when he forecasts growth edging up to 7.8
percent as housing, infrastructure and exports strengthen.
Companies may be holding some of the new credit in reserve in bank deposits,
according to Michael Werner, a banking analyst with Sanford C. Bernstein &
Co. in Hong Kong. A 3.1 trillion yuan increase in corporate bank deposits in
March may indicate companies front-loaded lending to guard against any
crackdown on credit channels after Xi and Li took office, he said.
Economic Effect
“That tells me that not all of the money has been allocated yet into the
economy,” Werner said.
The diminishing impact of credit on growth shows that companies are
restraining investment because they recognize that the “outlook for
sustainable final demand is weak” unless new policies boost household
consumption, said Ramin Toloui, the Singapore-based global co-head of
emerging markets portfolio management at Pacific Investment Management Co.,
manager of the world’s biggest bond fund.
“China’s challenge used to be to mobilize the factors of production --
labor, capital, and technology -- to service boundless global demand,”
Toloui said. “Now the challenge is to unleash the potential of Chinese
households to serve as sources of that demand.”
Asian Economies
Elsewhere in Asia today, a report showed the Philippine economy grew at the
fastest pace in almost three years in the first three months of the year.
Gross domestic product rose 7.8 percent from a year earlier, compared with a
revised 7.1 percent gain in the previous quarter.
South Korea reported that industrial production rose in April from the
previous month after three straight declines.
“It’s still hard to say the economy is showing an upturn,” Statistics
Korea Director-General Park Seong Dong told reporters in Sejong, adding the
gain was driven by increases in shipbuilding and mobile-phone parts
manufacturing.
Data in the U.S. today include jobless claims, the Bloomberg Consumer
Comfort Index and revised first-quarter figures for gross domestic product.
To contact Bloomberg News staff for this story: Kevin Hamlin in Beijing at
k*****[email protected]
To contact the editor responsible for this story: Paul Panckhurst at
p*********[email protected] |
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