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The Daily Brief for Thursday, 29 December 2016

China’s debt-laden corporates could be in for a soft landing rather than the credit crisis some analysts predict, writes David P. Goldman for Asia Times. If the consensus estimate for Chinese corporate earnings between 2015 and 2017 is in the right ball park, he says, then the credit position of such companies should improve significantly during the next year.

As long as Myanmar’s army relies on militias to control ethnic areas in the north of the country, the opium trade will continue to flourish, write Matthieu Baudey and Carole Oudot for Asia Times. Myanmar is the second biggest producer of heroin after Afghanistan and 90% of its poppy crop is grown in the shadowy mountains of Shan State, which has been embroiled in a decades-long civil war as a result of the trade.

South Korean prosecutors investigating an influence-peddling scandal that has engulfed President Park Geun-hye said on Thursday they are seeking a warrant to arrest the head of the national pension fund, the world’s third-largest. National Pension Service (NPS) chairman Moon Hyung-pyo has acknowledged that he pressured the fund to approve an US$8 billion merger between two Samsung Group units last year while he was head of the country’s health ministry.

China’s military advanced along several fronts in 2016, writes Bill Gertz in his defense review of the year for Asia Times. The world’s rising superpower advanced its concerted program to develop new asymmetric and conventional warfare capabilities while also continuing to challenge the United States for military control of key waterways in Asia – most notably the South China Sea.

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Kenny Hodgart

Kenny Hodgart is an editor for Asia Times.

Posted inChinaMiddle East

China Digest for Thursday, 29 December 2016

Regulator hits Huaxia Life, Soochow Life with 3-month ban

Huaxia Life Insurance and Soochow Life Insurance have been barred from registering new products for three months and must suspend all online sales of existing ones, Sina Finance reported on Wednesday, citing a notice on the China Insurance Regulatory Commission’s website. China’s insurance regulator has recently been cracking down on insurers found to be aggressively buying A shares because of concern that they are piling on too much short-term risk contrary to their core function.

Cosun Group head under police investigation over bond default

Cosun Group Chairman Wu Ruilin has been placed under police investigation, Caixin reported on Wednesday night. Cosun Group defaulted on bonds valued at more than 321 million yuan (US$46 million) last week. Zheshang Property and Casualty Insurance has said it would compensate some holders of the bonds, even though the bank that it had believed to have provided as guarantee said the documents had been forged.

Trust industry to be thrust into light with regulatory framework

The trust industry will be divided into eight categories based on use of funds – such as credit trusts and equity trusts, according to Yang Jiacai, assistant to the chairman of China Banking Regulatory Commission, Caixin reported on Wednesday. The move is intended to make trusts more transparent and regulated, and exclude them from the area of shadow banking, Yang said.

Home prices in major cities unlikely to drop in 2017, experts say

Residential property prices in tier-1 and tier-2 cities are unlikely to drop in 2017, even if the volume of transactions does, according to a group of experts cited by Sina Finance on Wednesday. China has rolled out a series of measures recently aimed at cooling down the property sector and establishing what the government calls a “healthy market.”

China’s economically developed regions running out of farmland

The most developed regions of China face a shortage of farmland following years of nonstop economic growth, according to a report by the Ministry of Land and Resources released on Wednesday. Most of the nation’s arable land reserves are concentrated in the midwest, the report added.

PBOC condemns report of yuan dropping below key support

Some media reports wrongly stated that the yuan fell through the psychologically important mark of 7 to the US dollar, the central bank said in a statement issued late on Wednesday, adding that it reserved the right to hold the organization responsible. The onshore yuan has been trading smoothly between 6.9500 and 6.9666, the People’s Bank of China said. The statement came shortly after Bloomberg data showed the yuan sliding through the key defensive line. The US financial news and data provider corrected its information.

Welcome flag raised to international shipping at free trade zones

The Ministry of Transport’s new Ship Registration Act has lifted the stipulation that vessels registering at China’s pilot free trade zones must be at least 50% domestically owned, Xinhua reported on Wednesday.

Asia Times Financial is now live. Linking accurate news, insightful analysis and local knowledge with the ATF China Bond 50 Index, the world's first benchmark cross sector Chinese Bond Indices. Read ATF now.