CreditSights' Zeng on China Property Markets

The video discusses the current state of the Chinese bond market, highlighting the impact of reopening hopes and property easing measures on risk sentiment. It also examines global bond market concerns, particularly in Korea and China, where firms are pulling back from issuing corporate bonds. The fiscal impact of COVID-0 is explored, noting the strain on local government debt and infrastructure stimulus. The risks of zombie companies and pressures on the banking sector are discussed, along with the potential recovery of the Chinese property market post-COVID, focusing on structural issues and tier city dynamics.

What factors are currently influencing the sentiment in the Chinese bond market?

• High vaccination rates and strong property market

• Reopening hopes and property easing measures

• Stable economic conditions and low inflation

• Increased foreign investments and trade surplus

Why are Chinese corporates hesitant to issue offshore dollar bonds?

• High onshore rates and strong US-China relations

• Cost concerns and political tensions

• Lack of demand and high inflation

• Strong domestic currency and low default rates

What is a significant fiscal challenge for China due to COVID-0?

• Strain on local government financing

• Increased foreign debt

• Decreased export revenues

• Rising unemployment rates

What is a medium to long-term risk for the Chinese economy?

• Immediate recovery of the property market

• Increased foreign investments

• Rapid technological advancements

• Emergence of zombie companies

Which cities are expected to face structural decline in the property market?

• All cities equally

• First-tier cities

• Lower-tier cities

• Second-tier cities