China promises tax cuts, support as it scrambles to control global message

A barrage of commentary from China’s top institutions shows authorities are stepping up efforts to manage the international message on China Evergrande Group’s collapse —even if the developer itself is staying silent about its default status.

Chinese leaders on Friday promised tax cuts and support for entrepreneurs to shore up slumping economic growth after a campaign to rein in surging corporate debt caused bankruptcies and defaults among real estate developers.

A statement issued after an annual planning meeting led by President Xi Jinping called for “maintaining stability,” reflecting anxiety about rising risks after economic growth sagged to an unexpectedly low 4.9 per cent over a year earlier in the quarter ending in September.

“Our country’s economic development is facing the triple pressure of demand shrinking, supply shocks and weakening expectations,” the statement said.

English-language statements from agencies including the China Banking and Insurance Regulatory Commission, along with a recorded broadcast from People’s Bank of China Governor Yi Gang on Thursday, suggest Beijing is seeking to target global investors with a clear message: there won’t be a bailout of Evergrande, but the risks are ring-fenced.

Meanwhile, Chairman Hui Ka Yan’s shareholding in embattled China Evergrande Group has dropped to 59.78 per cent from 61.88per cent, Hong Kong stock exchange filings showed, in a forced selling by a third party with whom the shares were pledged.