China rocked by cash crunch, surprise fall in factory output
June 21, 2013 -- Updated 1954 GMT (0354 HKT)
- Lack of bank access to cash, surprise fall in factory output rock China
- China's seven-day rate jumped to record 12% after Beijing refused new funds
- China central bank aims to slow expanding debt, easy access to credit
- Shanghai Composite Index has slid 10% since the start of June
Hong Kong (CNN) -- China delivered a one-two punch of negative economic data this week, hitting first with an initial report on factory activity falling to a surprise nine-month low and then with interbank lending rates rocketing to a record high.
The gloomy numbers keep fears alive that the world's second-largest economic engine is not just slowing down -- but also seizing up.
China's main seven-day repurchase rate jumped to a record 12% this Thursday, according to CME Group. China's weighted average overnight repo rate hit 13.1% -- the highest in more than a decade.
The rate spikes are a reaction to Beijing's decision earlier this week to withhold new infusions of cash into the markets. One of the central bank's aims is to slow the growth of China's ballooning debt and stop easy access to credit.
China's cash crunch a 'homegrown issue'
In China, economics influences politics
China's GDP expected to grow
U.S.: China currency very 'undervalued'
The country's total debt is estimated to stand at more than 200% of GDP when debt from the central government, local governments, corporations and households are included, says Swiss bank UBS.
In April, Fitch had warned China of its high debt levels, downgrading the country's long-term currency rating. The ratings agency cited expansion of easy credit and structural weakness in China's economy.
However on Friday, repurchase rates fell on reports that China's central bank had supplied more than $8 billion in new liquidity to ease the current cash crunch.
On June 20, the same day that China's repurchase rates hit record highs, HSBC's June "flash" purchasing managers' index fell to a nine month low of 48.3. A PMI reading below 50 indicates contraction in the country's manufacturing sector as new export orders plunged from major trading partners like the United States and Europe.
Some China watchers fear the country will miss its self-imposed 2013 growth target of 7.5%.
Since June 1, China's benchmark Shanghai Composite Index has fallen 10%.
Part of complete coverage on
September 18, 2013 -- Updated 0124 GMT (0924 HKT)
When was the last time you adjusted your business strategy based on China's changing consumer behavior?
September 11, 2013 -- Updated 1258 GMT (2058 HKT)
For the first time, Apple has launched not one, but two iPhones at its now-annual iPhone launch event. Stuart Miles argues the strategy is simple -- but smart.
September 9, 2013 -- Updated 1508 GMT (2308 HKT)
If austerity had been a clinical trial, it would have been stopped. Why? Because it kills, health experts argue.
September 5, 2013 -- Updated 1741 GMT (0141 HKT)
Samsung just launched their next, new, big time product. It's the Galaxy Gear smartwatch. But do we really need one?
September 2, 2013 -- Updated 0548 GMT (1348 HKT)
Everyone knows that it's a time of dramatic change in Asia's airline industry. But can names like this work?
August 29, 2013 -- Updated 1422 GMT (2222 HKT)
Germany's Wolfgang Schaeuble speaks to CNN's Nina dos Santos in a rare interview. He has a tough message for the eurozone.
August 22, 2013 -- Updated 0940 GMT (1740 HKT)
Banks are being scrutinized over the extreme working hours put in by interns following the sudden death of a 21-year-old undergraduate at the Bank of America Merrill Lynch.
August 21, 2013 -- Updated 1759 GMT (0159 HKT)
Richard Quest hates public speaking. But he is determined to overcome this issue. Will it work?
August 20, 2013 -- Updated 1302 GMT (2102 HKT)
Oslo, Norway ranks as the world's most expensive city for expatriates, according to a survey by ECA International, a global human resources consultancy firm.
April 22, 2013 -- Updated 0647 GMT (1447 HKT)
Twitter resumes -- or "twesumes" -- have been touted as the best way for social media-savvy types to snag a dream job.
April 17, 2013 -- Updated 0800 GMT (1600 HKT)
We live in a three-speed economic world, according to the International Monetary Fund.
April 17, 2013 -- Updated 1627 GMT (0027 HKT)
Women have long dominated the heated discussion around gender equality. But men need to too, says Facebook's Sheryl Sandberg.
April 19, 2013 -- Updated 1053 GMT (1853 HKT)
Security threats from mobile malware are on the rise and nearly 95% of targets operate on the Android operating system, according to a new report from NQ Mobile.
April 15, 2013 -- Updated 2006 GMT (0406 HKT)
Microsoft is working on a touch-enabled smartwatch, The Wall Street Journal says, reporting that the company asked Asian suppliers to ship components for the device.
April 19, 2013 -- Updated 0647 GMT (1447 HKT)
Give your anxious, negative colleagues a chance, and they just might surprise you.
April 17, 2013 -- Updated 1046 GMT (1846 HKT)
In Europe, high-speed rail has come to stand for ease and efficiency where journeys of four hours or less trump airplanes and the hassle of airport security.
April 19, 2013 -- Updated 1812 GMT (0212 HKT)
Infographic: Singapore may be tiny but it is also one of East Asia's most powerful trading hubs.
April 22, 2013 -- Updated 0027 GMT (0827 HKT)
In Hong Kong urban lore, an apartment where a violent death took place can often be bought for as much as 10-30 per cent off the market price.
April 16, 2013 -- Updated 1605 GMT (0005 HKT)
With gold prices officially in a bear market, investors must ask themselves if this is the time to buy?
Today's five most popular stories