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China commercial paper delinquencies surge as property developers struggle -Breaking

by Mike Robinson

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© Reuters. FILE PHOTO – A worker in China for the recycling of electric equipment passes residential buildings near Beijing on December 2, 2021. REUTERS/Tingshu Wang

SHANGHAI, (Reuters) – The December figure for Chinese businesses “consistently late” in commercial paper payments rose 26% from a month ago. This was due to a liquidity crisis that hit property developers in China.

The Shanghai Commercial Paper Exchange reported that 484 companies overdue at least 3 commercial paper payments between Aug. 1 and Dec. 31 2013.

There were 100 more companies in December than November, and 95 of them in the real-estate sector.

After declaring a default last week on a trust-loan loan, Shimao Group Holdings has begun discussions with creditors about payment arrangements.

China’s commerical market in paper came under new scrutiny in 2021. Regulators demanded greater transparency as part of their efforts to control the skyrocketing debts in China’s property sector.

The commercial paper that isn’t considered to be interest-bearing is often used by developers in the real estate sector. This is a form of payable that makes promises about future payments.

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