China can be a real chore, dear readers. You’ve got business licenses, visas, residence permits, hukou, chops, publishing permits–the list goes on, we tell you. Sometimes it’s an ordeal just to stay afloat. But know this: you’re never alone when you struggle in China.
Take Tesla Motors, which this week saw a slew of mainland media report on imminent job cuts at the firm’s local outfit as the number of vehicles it brought to China for sale took a nosedive. Now, we’re not saying there’s no room for luxury electric cars in China, but we are saying there’s an ongoing crackdown on luxury goods and China has basically no charging infrastructure ready for vehicles that don’t run on fossil fuels. Or maybe you’d prefer Kaisa. (In which case you might be the first.) This week the Chinese developer finally revealed its debt restructuring plans, which didn’t go over too well with investors.
But Kaisa isn’t the only one struggling with debt. It turns out that throwing money at China’s economy was great for providing a buffer mid-financial crisis in 2008, but now those chickens of debt are coming home to roost, and it looks like not a few of them have avian influenza. It seems in Guangdong alone the government racked up a startling RMB1 trillion of debt just last year. Now it looks like Beijing will allow some local government debt to be changed into bonds, but while the interest will be lower, the money owed won’t be going anywhere any time soon.
And real estate? Dear readers, let’s just say we’re glad we aren’t realtors right now. Property sales fell 16.3% over the last two months, leaving unsold property space up over 17 million square meters in China. That should at least mean a better deal for the many migrant workers saving up for a patch of urban land to call their own, but alas, thousands of protesting shoe factory workers couldn’t catch a break this week as management refused to let them spend their earnings on a house closer to home.
But at least the central bank’s governor promised interest rates will be liberalized soon! Er, soonish. Alright, well, he didn’t exactly say when it would happen, or whether it was even a sure thing. But at least let us have this one, we’re begging you. With growth slowing in industrial production, retail sales and fixed asset investment, it’s all we can do to stop ourselves bolting for the door. Or, for that matter, a window. ♦