The economic planning agency of China is pushing national businesses to repay their international dues a few days before another payment deadline for real estate developer Evergrande, post avoiding last week’s default barely.
The National Development and Reform Commission said on Tuesday that companies need to be ready and prepared to pay international or offshore bond principal and interest to maintain their reputation and market order. The agency didn’t mention the company by name, but the announcement was made by Evergrande, a developer with more than $ 300 billion in debt and who began to embody concerns about the sector. Last-minute interest payments With Friday offshore bonds.
Just after the energy crisis, the Chinese market is now worried about the International debts of privately-owned organizations. With huge amounts of loans and bigger amounts of interest, the government is worried about the reputation and image that it has in the world markets and economies.
The orders have been like to pay off the debts and to be ready to clear the debts. The energy crisis has already made china weaker in terms of purchasing things. And they certainly do not want any excess of that. Also due to the Australia De Facto Ban, the relations with Australia is been slack, so they do not want any further bad impression with any country or bank.
Companies are being pressurized by the government. A policy named “Three red lines” was designed and bought into the market to limit access to debt and to avoid over-borrowing in the fear of an asset bubble. An asset bubble means the price of an asset like stocks, real estate, bonds, commodities increases at a rapid pace without underlying some of them or all of the fundamentals like equally fast-rising demand the justify the hike of price.
China, the second-largest economy in the world has currently been going through some unforeseen problems, however, they are trying to rectify the same but due to facts and figures the speed at which these problems are getting solved or looks like will get solved is quite lower than usual.
From being such a dependable economy such a lack of planning is hitting them hard. To get the best out of the companies and the industries, they are applying new strategies and soon they will become the superpower they were.
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