🔔 China, CHINA, CHINA! 📉

 Evergrande Group plans to suspend interest payments due on loans to two banks on Sept. 21

Also delayed payments to several trust firms, REDD reported, adding that the co. may suspend all payments to its wealth management products starting Sept. 8 (today)https://t.co/SQmBUXkvwR— Tim (@VolaTim) September 8, 2021 

At the Bank of China, the impaired loan ratio for real estate stood at 4.91% in June, compared with 0.41% a year earlier. So far, it looks manageable but it would become a much bigger problem if falling prices or a weaker job market start to hurt mortgage repayment.

Real estate, construction and mortgages accounted for 41% of the BOC’s loans in mainland China, for example. The housing boom has fueled an enormous rise in household borrowing: it stood at 62% of gross domestic product as of June, compared with 44% five years earlier.

"History doesn't always repeat but it often rhymes"

The firm seems to have taken the statements of Mr. Xi’s regime at face value. It has drawn a distinction between state-owned enterprises and privately owned companies, but that is far from reality. The regime regards all Chinese companies as instruments of the one-party state.

This possible misunderstanding could explain BlackRock’s decision, but there may be another explanation. The profits to be earned from entering China’s hitherto closed financial markets may have influenced their decision.

The BlackRock managers must be aware that there is an enormous crisis brewing in China’s real-estate market. They may believe that investment funds flowing into China will help Mr. Xi handle the situation, but the president’s problems go much deeper. China’s birthrate is much lower than official statistics indicate and Mr. Xi’s attempts to increase it have made matters worse.

The president recently launched his “Common Prosperity” program, which is a fundamental change in direction. It seeks to reduce inequality by distributing the wealth of the rich to the general population. That does not augur well for foreign investors.

Pouring billions of dollars into China now is a tragic mistake. It is likely to lose money for BlackRock’s clients and, more important, will damage the national security interests of the U.S. and other democracies.

Xi is willing to forgo a boost in China’s international financial prestige to protect the party’s interests and send a signal to business elites: the party comes first. This is no David and Goliath story, however. It’s more akin to a family feud, given the close and enduring connections between China’s nominally private firms and its political system.

Indeed, nearly all of China’s most successful entrepreneurs are members of the CCP, and for many companies, success depends on favors granted by the party, including protection from foreign competition.

But whereas previous Chinese leaders granted wide latitude to the private sector, Xi has forcefully drawn a line. Doing so has further restricted the country’s ability to innovate.

No matter how sophisticated Beijing’s regulators and state investors may be, sustained innovation and gains in productivity cannot occur without a vibrant private sector.

 The correct answer is $600 in #EQO.

For every trader you invite to EQONEX in September, you will win a $100 referral bonus in #EQO.

DOUBLE your entire September bonus when one of your friends receives an EQO-D airdrop on September 20.https://t.co/7mSAAnBO5U https://t.co/wt0pmczIlX— EQONEX (@eqonex) September 6, 2021