China Industrial Profits Fall Most Since 2011 Amid Slowdown (Bloomberg, Jan 27) Industrial profits were down 8% year-on-year in December, according to figures from the National Bureau of Statistics. The drop reflects a lengthening litany of economic issues confronting Chinese policymakers and traditional enterprises, including: lingering overcapacity problems, an ongoing property sector slump and continued weakness in commodities prices. Specifically, oil processors and nuclear fuel enterprises saw profits decline 79.2% last year, NBS figures show. Miners were also hard hit, with profits falling 46.2% over the same period. On the bright side, automaking profits jumped 18.1%.

Chinese Manufacturing Weak for Second Consecutive Month (BBC, Jan 23) HSBC/Markit issued their preliminary purchasing managers’ index for January with a headline reading of 49.8, up from a final reading of 46.6 in December but still indicating contraction. With consumer inflation rising just 1.5% in December, signs of a persistent manufacturing slowdown have raised fresh concerns about the emergence of deflation in China’s economy.

Shanghai Takes China Lead as Annual Report Ignores GDP Growth Target (SCMP, Jan 25) With Beijing stressing the need to pursue higher-quality development even if it means slower growth, Shanghai has become the first provincial-level municipality in China to scrap its annual GDP target. In a work report delivered before the city’s legislature, Shanghai mayor Yang Xiong mentioned only that local authorities would focus on maintaining “steady growth” this year. Creating 500,000 new jobs and keeping unemployment below 4.5% were also identified as goals. 

China Conducts Fresh Bank Stress Test (Dow Jones, Jan 23) Lenders in China have been tested on their ability to withstand risks associated with the country’s housing market and swelling levels of local government debt, according to an official with the country’s banking regulator. As is typical in such cases, specific test results were not made public. China’s commercial banking sector saw its non-performing loan ratio climb to 1.29% by the end of December, up from 1.16% at the end of September and hitting a four-year quarterly high. China’s flagging real estate sector is widely regarded as a major source of risk for local banks. Property developers held 5.63 trillion yuan in outstanding loans by the end of 2014, up 22.6% from a year earlier, according to figures issued Friday from China’s central bank.

RELATED: China Real Estate Loans See Rapid Growth (Xinhua, Jan 23) Central bank statistics put outstanding loans for housing development at 4.28 trillion yuan by year-end, up 21.7% from a year earlier. Outstanding loans for land development hit 1.35 trillion yuan, up 25.7%.

China Property Agony Deepens as Trust-Loan Lifelines Cut (Bloomberg, Jan 26) Issuances of property-related trust products totaled 38.5 billion yuan during the fourth quarter, down 62% over the on-year period, according to Bloomberg reports citing Use Trust data. Local developers are reportedly scheduled to repay trusts valued at 241 billion yuan this year, compared with 178 billion yuan in 2013. Investors and trust firms are increasingly on edge about default risks within China’s weakened property sector, particularly after Shenzhen-based Kaisa Group Holdings missed a $23 million coupon payment earlier this month before failing to repay a 2.5 billion yuan trust last week. Of 336 publicly-traded real estate businesses, 135 now have debt levels in excess of equity, up from 57 in 2007, according to Bloomberg calculations.

Coal Production Drops in China for 1st Time in 14 Years (AP / ABC News, Jan 24) Chinese miners churned out 3.5 billion tons of coal in the first 11 months of last year, representing a drop of 2.1% over the same period in 2013 and putting the country on track to record its first decline in output since 2000, according to reports citing figures from a local coal industry association. The association’s data also show profits for major domestic coal companies falling 44% to 110.5 billion yuan over the same period.

RELATED: China Cuts Energy Intensity by 4.8 pct in 2014 (Reuters, Jan 19) According to the State Council, Chinese energy intensity – a measure of energy use in relation to economic growth – reportedly fell by 4.8% last year, implying a better-than-expected increase in efficiency as planners work to curb pollution. Authorities had aimed for a 3.9% reduction in energy intensity last year, after a drop of 3.7% in 2013. Overall power output increased 3.2% in 2014, the smallest increase since 1998.

China’s Dec Russian Crude Imports Hit Record as Prices Fall (Reuters, Jan 23) Russia has surpassed Oman to become China’s third-largest foreign supplier of crude, after Saudi Arabia and Angola. China imported 876,000 barrels of Russian crude per day in December, up 86% year-on-year and setting a new record high. These results bring imports for 2014 to roughly 662,000 barrels per day, up 36% over the previous year. 

China Development Bank releases $95 billion lending plan: Xinhua (Reuters, Jan 22) China Development Bank intends to issue new loans of at least 590 billion yuan this year, including 400 billion yuan to support urban housing renovation. Meanwhile, loan packages of 100 billion yuan and 90 billion yuan are reportedly earmarked for railway projects and water infrastructure projects respectively. Last year, the bank, which operates under the direction of the State Council, extended loans of 408.6 billion yuan to urban restoration projects, 119.5 billion yuan to railway projects and 81.4 billion yuan to water projects.

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