Editor’s note for Monday, December 14, 2020
A note from the editor of today's The China Project Access newsletter.
My thoughts today:
Chinese corporate and government debt has beenย in the headlines almost every day in recent months. ย
Last week we looked at how Chinaโs Belt and Road lending is drying up. Today another victim of excessive enthusiasm for expansion is in the news: Shandong Ruyi, theย conglomerate that owns the Lycra brand and whose chairman Qiลซ Yร fลซ ้ฑไบๅคซ previously told Reutersย that โLVMH was the companyโs role model, [is] struggling with the debt taken on to fund the dealsโ to emulate the French luxury house. A proposed acquisition ofย Bally has fallen throughย after the company defaulted on a $153 million bond. ย
Perhaps the go-go years of mad spending and irrational exuberance about Chinaโs apparently limitless potential drawing to a close? Meanwhile, Chinaโs acquisitive internet giants, flush with cash rather than drowning in debt, are about to face a different problem: Chinaโs regulators are going after them. Alibaba and Tencent are in the crosshairs.
Need gifts for sinophiles?ย The China Project has you covered with our holiday gift listย (delivery to the U.S. only for now).
Our word of the dayย is to acquire: ๆถ่ดญ shลugรฒu.
โJeremy Goldkorn, Editor-in-Chief
