We should be worried about China
Plus: PwC's unusual startup agreement; Optus wants to cut a deal with TPG; APRA's cyber concerns; More turnover at Fortescue; AI spruiking on the ASX.
Predictions of a swift economic recovery in China after the country finally ditched zero-covid restrictions late last year have failed to materialise, to put it mildly. And that has to be a serious concern for Australia's government, ahead of Prime Minister Anthony Albanese's expected talks with China's President Xi Jinping later this year.
Growth is decelerating, consumer confidence has slumped, and youth unemployment data got so bad they stopped publishing it. A surprise central bank rate cut and pledges from Beijing’s policymakers to provide fresh support have fallen short and so far failed to rally sentiment.
Shares in Chinese property developer Evergrande Group resumed trading today in Hong Kong for the first time since March last year and fell by 87%. Evergrande’s market value had already collapsed by more than 95% from its heady peak before they were halted.
Having rode the crest of China’s real estate boom to become the country’s biggest property developer – founder Xu Jiayin was also briefly China’s richest man – the company first defaulted on a dollar bond in December 2021. Fellow real estate behemoth Country Garden is now also in strife.
