KWEB - Ponzi Finance Losing Believers - Not Just In China

• After years of raising funds through bond issuance to yield-desperate buyers, Chinese property developers are heavily indebted, and since last summer, many have been defaulting on payments to bondholders.
• Responding to weakness in the domestic economy, the Chinese central bank reversed its short-lived 2021 tightening bias this month to cut overnight lending rates for the first time since April 2020. Chinese stocks have slumped in response, down 20% in January.
• Beijing is refocused on weakening its currency and increasing exports to the rest of the world. But after two years of drastically elevated goods consumption globally, a spending preference for services is overdue.
• This is a negative for economic growth in China and many export-dependent countries, including Germany and Canada.

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