Key points

  • China’s economic turmoils keep increasing as credit data released Friday shows a slump in demand for households and businesses borrowing money.
  • Developer Country Garden suspended trading at least 10 of its mainland-china traded Yuan bonds.

China’s economy is set to endure more pain as a slump in demand for borrowing money reflects in recent credit data. Real estate problems now persist as consumer sentiment grows weak.

More pain for Chinese markets going forward?

The Chinese economy has been heavily impacted by economic installment. What was considered a promising economy to turn around world economic issues via opening supply chains has now more than stalled.

Credit data released last Friday show the country is experiencing increasingly low demand for borrowing money. This, in turn, affects property markets as fewer people are expected to invest in real estate in the coming months there. Once a very stable real estate company, Country Garden is now on the brink of default, with many other competitors in turmoil.

New local currency bank loans plunged 89% in July from June to 345.9 billion Yuan, much lower than the forecasted 800 billion Yuan. This was the lowest loan number since late 2009. The real estate sector, where most of the country’s household wealth is, has been impacted, and concerns are rising around it.

Developer Country Garden announced this weekend that it suspended at least 10 mainland China-traded yuan bonds. Last week, it missed coupon payments on two U.S. dollar-denominated bonds, with its U.S. bonds accounting for just under half of outstanding high-yield U.S. dollar-denominated bonds.

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