{"id":117861,"date":"2023-08-16T05:49:46","date_gmt":"2023-08-16T05:49:46","guid":{"rendered":"https:\/\/lasixlineon.com\/?p=117861"},"modified":"2023-08-16T05:49:46","modified_gmt":"2023-08-16T05:49:46","slug":"china-2-4trn-economic-meltdown-has-spillover-potential-for-uk","status":"publish","type":"post","link":"https:\/\/lasixlineon.com\/politics\/china-2-4trn-economic-meltdown-has-spillover-potential-for-uk\/","title":{"rendered":"China \u00a32.4trn economic meltdown has spillover potential for UK"},"content":{"rendered":"
China\u2019s potential economic meltdown, with its \u00a32.4trillion banking system under threat, has \u201cdefinite spillover potential\u201d for the UK, a banking expert has warned.<\/p>\n
Tax consultant Bob Lyddon was speaking after the UK stock market slumped yesterday as a result of concerns about the Chinese economy.<\/p>\n
London’s FTSE 100 plunged by around 1.7 percent during the day, reaching lows of more than a month as all but a handful stocks on the blue-chip index saw losses.<\/p>\n
In particular there are worries about real estate company Country Garden Real Estate Group, which last week warned it was anticipating a net loss of between \u00a34.88billion to \u00a36billion, compared with earnings of \u00a3210million in the first half of 2022.<\/p>\n
Harvey Jones yesterday warned of the threat of so-called \u201ccontagion\u201d, whereby market jitters in one market spread to others.<\/p>\n
Don’t miss… <\/strong> World economy on the brink as Chinese firm worth \u00a3189bn close to collapse[LATEST] <\/strong><\/p>\n Mr Lyddon, founder of Lyddon Consulting Services Ltd, told Express.co.uk: \u201cThis Chinese company has about $200 billion [\u00a3157billion] of debt and it missed a debt payment.<\/p>\n \u201cIt is a massive real estate concern and the second one, after Evergrande, to get into difficulty.\u201d<\/p>\n Missing a payment did not mean the company was is in default and the lenders could still repossess and try and sell its properties, Mr Lyddon stressed, adding: \u201cIt has 30 days to find the money and cure its failure to pay.\u201d<\/p>\n However, he added: \u201cIt is not a good sign.<\/p>\n \u201cChina appears to be in considerable trouble, the banks will not want to repossess all those properties and try to sell them all together at this time in a falling market.<\/p>\n \u201cThat is the sort of thing that causes a rout.\u201d<\/p>\n He continued: \u201cIt would be nice to know how much HSBC is exposed, although it would not be within the ring-fenced UK bank.<\/p>\n \u201cThe contagion could be on the value of real estate worldwide, and that would not be nice for the UK, and on Chinese banks who are very large and whose financial strength is questionable given state control and accounting standards.<\/p>\n We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info<\/p>\n Don’t miss… <\/strong> \u201cWhich UK banks are heavily exposed to Chinese banks?<\/p>\n \u201cWe don\u2019t know, but HSBC and Standard Chartered certainly and probably Barclays and NatWest as well.<\/p>\n \u201cLloyds and Santander less likely.<\/p>\n \u201cSo there is a definite spillover potential.\u201d<\/p>\n Coming into this year, the expectation was that China’s economy would grow enough after the government removed anti-COVID restrictions to boost a global economy weakened by high inflation.<\/p>\n However, China\u2019s recovery has faltered so much that it unexpectedly cut a key interest rate on Tuesday and skipped a report on how many of its younger workers were unemployed.<\/p>\n Across the Atlantic, worries about the knock-on effects for the rest of the global economy are weighing on Wall Street, where stocks have already been retrenching in August.<\/p>\n<\/p>\n
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