Caixin
Sep 28, 2022 08:45 AM
CX DAILY

CX Daily: Cash-Strapped Local Governments Turn to Financing Vehicles to Plug Fiscal Shortfalls

LGFVs /

In Depth: Cash-strapped local governments turn to financing vehicles to plug fiscal shortfalls

Local government financing vehicles (LGFVs) have played a key role in China’s economic and social development over the past two decades, especially in funding and building infrastructure investment on behalf of local authorities across the country.

Since last year they’ve been given yet another task by their local government masters — buying land and building homes to fill a massive funding gap triggered by a slump in revenue from land as cash-strapped developers disappeared from the market.

Congress /

Communist Party elects delegates ahead of 20th National Congress

China’s Communist Party finished selecting the nearly 2,300 delegates charged with indirectly choosing the seven people who will lead the country from 2023 to 2028.

The 2,296 delegates will elect the 200 or so members of the party’s Central Committee, which in turn will name the seven members of the Politburo Standing Committee — China’s top leadership body.

FINANCE & ECONOMY

 

Yuan /

Charts of the Day: Yuan’s cross-border settlements grew in 2021

China’s currency gained traction globally in 2021, with cross-border yuan settlements growing 29% by value from the previous year, a central bank report shows.

The growing use of the yuan across borders indicates that China’s years-long effort to promote the currency’s use globally — including through its own Cross-Border Interbank Payment System (CIPS) — is paying off.

Yuan plunge nears 14-year low, inviting aggressive PBOC pushback

Corruption /

Former head of Exim Bank’s Beijing branch kicked out of Communist Party

Li Li, former Communist Party chief and president of the Beijing branch of the Export-Import Bank of China (Exim Bank), was expelled from the party, removed from public positions and turned over to prosecutors on corruption charges, the country’s anti-graft watchdog said Monday.

Li is known as the “godmother” of China’s shipping industry as she initiated a large number of deals backing the sector. She oversaw the policy bank’s shipping and transport-related financing between 2006 and 2012 before she was promoted to Shanghai branch head. Li became head of the Beijing branch in 2019.

China-North Korea /

China, North Korea restore rail link on Kim Jong Un’s key trade route

China is reopening its main train route with North Korea after a five-month hiatus due to Covid, bringing a potential boost to Kim Jong Un’s sanctions-battered economy.

Foreign Ministry spokesperson Wang Wenbin said Monday at a regular press briefing in Beijing the cargo rail link between China and North Korea is reopening after service was halted in April as part of measures to control Covid.

Quick hits /

Hong Kong’s exports plunge the most since pandemic began

China industrial profits fall further as producer prices slow

BUSINESS & TECH

December 6, 2020, a Gome store in Shanghai. Photo: VCG

Gome /

Cash-strapped retailer Gome struggles to pay staff, plans debt restructuring

Money-losing Chinese appliances retailer Gome Retail Holdings Ltd. is struggling to pay staff and is planning to restructure its debt as its short-term borrowings pile up, sources with knowledge of the issue told Caixin.

A number of Gome employees said they weren’t paid their salaries last month and that the company has delayed paying out first-half bonuses.

NEVs /

China extends NEV purchase tax exemption another year

China’s Ministry of Industry and Information Technology and Ministry of Finance extended the exemption on 10% purchase taxes for new energy vehicles (NEVs) until the end of 2023 as the government plans to phase out a long-running subsidy program by year-end.

The government has been signaling the third extension of the purchase-tax exemption since July. In August, Premier Li Keqiang told a State Council executive meeting that the tax exemptions will amount to 100 billion yuan ($14 billion).

Quick hits /

Weaker demand for Chinese goods spells end of shipping boom

China’s renewables growth lifts copper demand as housing falters

Long Read /

How ADB engaged with AIIB

GALLERY

Shinzo Abe’s state funeral

 

Recommended newsletter for you /

Caixin Must-Read Newsletter brings you the best of our coverage and stories you can’t miss. You can opt-in now and get hand-picked news coverage delivered to your inbox each week for free.

Thanks for reading. If you haven’t already, click here to subscribe.

Share this article
Open WeChat and scan the QR code
NEWSLETTERS
Get our CX Daily, weekly Must-Read and China Green Bulletin newsletters delivered free to your inbox, bringing you China's top headlines.

We ‘ve added you to our subscriber list.

Manage subscription
PODCAST
Caixin-Sinica Business Brief: China Mourns Death of Former President Jiang Zemin
00:00
00:00/00:00