John Foley is Reuters Breakingviews' China editor. Based in Beijing, he writes on China’s economy and financial markets. John established Breakingviews’ Hong Kong bureau in 2009, and previously wrote on mergers and acquisitions, capital markets and consumer goods in London. Before joining Breakingviews in 2004, John worked as a copywriter for a London-based advertising agency. John read English Literature at Exeter College, Oxford. Follow John on Twitter @johnsfoley
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The clip to borrowing costs won’t much change life for credit addicts or for savers. The central bank’s move is little more than a signal from on high that planners are up with events. When it comes to managing the Chinese economy, official interest rates play a limited role.
The default and restructuring of housebuilder Kaisa may have been unexpected, but China’s property developers are also showing visible signs of strain. From financial extensions to split-level sales, there are a few recurring features that give cause for concern.
Days after rattling creditors with a late interest payment, developer Kaisa has disclosed borrowings double those it reported at the end of June. It may be a tactic to force lenders into a restructuring. Still, it’s a reminder that many of the sector’s horrors remain unexcavated.
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