In the Year of the Dog, Beijing will continue the bite of deleveraging
Take a spin around Tianjin’s Binhai New Area, a massive development project about an hour from Beijing, and you’ll see one partially finished building after another— and empty storefronts with black crosses painted on glass doors. Conceived as a futuristic financial hub and business centre on par with Shanghai’s Pudong district or New York City, Binhai hasn’t yet lived up to the hype. “Only about one-third of the apartments here are occupied,” estimates Liu Yulan, 75, who moved to the area to be closer to her daughter-in-law. “I don’t see Binhai becoming a boom town.”
In January, Binhai government officials made a startling admission. The region was revising down its 2016 gross domestic product—by about 30 percent, to 665.4 billion yuan ($104.9 billion). That news followed revelations of creative accounting by two northern provincial governments: Liaoning and Inner Mongolia, both of which have been hit hard by recent downturns in steel, oil, and coal prices.
President Xi Jinping is far less tolerant of such profligate spending and fudged data than his predecessors, and he’s in the midst of an historic three-year battle against the systemic financial risks threatening to hinder the economy. So far the focus has been on excessive lending by shadow banks and acquisitive private conglomerates such as the Dalian Wanda Group, whose founder, Wang Jianlin, is China’s fourth- richest executive, and Anbang Insurance Group Co., owner of the Waldorf Astoria New York. Amid pressure from bank regulators, these companies are selling assets at a furious pace. A once-voracious aviation and shipping giant, HNA Group Co., plans to jettison $4 billion in commercial properties in Chicago, Minneapolis, New York, and San Francisco.
この記事は Bloomberg Businessweek Middle East の 1 March, 2018 版に掲載されています。
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