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China State Media Deletes Contents Related to the Plan to Merge State Asset Managers with CIC

2024.01.30

 

Key Takeaways

  • Initial report on China’s plan to merge state asset managers with CIC removed from Xinhua Finance.
  • The move is part of Beijing’s efforts to stabilize capital markets and address real estate debt crisis.

Sudden Retraction Raises Questions

China’s state media, Xinhua Finance, recently published a report indicating that Beijing plans to merge its largest state-owned bad debt asset managers with China Investment Corporation (CIC). However, the article was unexpectedly removed, causing speculation about the government’s strategic financial moves.

The Plan for Consolidation

Originally, the report cited anonymous sources stating that China Cinda Asset Management, China Orient Asset Management, and China Great Wall Asset Management could be integrated under the umbrella of CIC. This potential consolidation aligns with China’s broader reform agenda to ‘restructure key financial institutions,’ the anonymous sources said.

Mysterious Removal of the Report

The removal of the story from Xinhua’s website adds an element of mystery to the situation. It raises questions about the veracity of the initial information or whether the plan is still under deliberation. China Investment Corp has not responded to inquiries for clarification.

 

The news came alongside other significant financial announcements by China’s securities regulator, including the suspension of restricted share lending. These moves are part of Beijing’s ongoing commitment to reinforce the stability of its capital markets and instill investor confidence.

Tackling the Real Estate Crisis

Beijing is grappling with significant financial risks stemming from a burgeoning debt crisis in its real estate sector. Recent measures, including a substantial cut in mandatory cash reserves for banks, indicate a focused effort to alleviate pressures on property developers and stimulate economic growth.

 

China’s real estate market challenges are deeply connected to local government finances, historically reliant on land sales to developers for revenue. The 2020 crackdown on developers’ debt-driven growth models has had far-reaching impacts, slowing consumer spending and affecting the broader economy.

 


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