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Ratings agencyMoody’sslapped a downgrade warningon China’s credit rating on Tuesday,saying costs to bail out localgovernmentsand state firmsandcontrol itsproperty crisiswould weigh on the world’s No. 2 economy.

The downgrade reflects growing evidence that authorities will have to provide more financial support for debt-laden local governments and state firms, posing broad risks to China’s fiscal, economic and institutional strength,Moody’ssaid in a statement.

Historically, about one-third of issuers have been downgraded within 18 months of the assignment of a negative rating outlook.

“The outlook change also reflects the increased risks related to structurally and persistently lower medium-term economic growth and the ongoing downsizing of the property sector,” Moody’s said.

China’s blue-chip stocks slumped to nearly five-year lows on Tuesday amid worries about the country’s growth, with talk of a possible cut by Moody’s denting sentiment during the session, while Hong Kong stocks extended losses.

China’s major state-owned banks, which had been seen supporting the yuan currency all day, stepped up US dollar selling very forcefully after the Moody’s statement, one source with knowledge of the matter said.

The yuan was little changed by late afternoon.

The cost of insuring China’s sovereign debt against a default rose to its highest since mid-November.

“Now the markets are more concerned with the property crisis and weak growth, rather than the immediate sovereign debt risk,” said Ken Cheung, chief Asian FX strategist at Mizuho Bank in Hong Kong.

US-listed shares of Chinese companies fell, with Baidu off 0.5%, Alibaba Group Holding down 1.1%, and JD.com Jdropping 1.9%.

The move by Moody’s was the first change on its China view since it cut its rating by one notch to A1 in 2017, also citing expectations of slowing growth and rising debt.

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WhileMoody’saffirmedChina’s A1 long-term local and foreign-currency issuer ratings on Tuesday — saying the economy still has a high shock-absorption capacity — it said it expects the country’s annual GDP growth to slow to 4.0% in 2024 and 2025, and to average 3.8% from 2026 to 2030.

Moody’s main peer, S&P Global, said later in a long-scheduled global outlook call that its big concern was that “spillovers” from any worsening in the property crisis could push China’s gross domestic product growth “below 3%” next year.

Moody’s outlook downgrade comes ahead of the annual agenda-setting Central Economic Work Conference, which is expected around mid-December, with government advisers calling for a steady growth target for 2024 and more stimulus.

Analysts say the A1 rating is high enough in investment-grade territory that a downgrade is unlikely to trigger forced selling by global funds.

S&P and Fitch, the other major global rating agency, both rate China A+, the equivalent of Moody’s A1, and have stable outlooks.

China’s Finance Ministry said it was disappointed by Moody’s decision, adding that the economy will maintain its rebound and positive trend.

It also said property and local government risks are controllable.

“Moody’s concerns about China’s economic growth prospects, fiscal sustainability and other aspects are unnecessary,” the ministry said.

Most analysts believe China’s growth is on track to hit the government’s target of around 5% this year, but that compares with a COVID-weakened 2022 and activity is highly uneven.

The economy has struggled to mount a strong post-pandemic recovery as the deepening crisis in the housing market, local government debt concerns, slowing global growth and geopolitical tensions have dented momentum.

A flurry of policy support measures have proven only modestly beneficial, raising pressure on authorities to roll out more stimulus.

“We spent the better part of three years watching China have this sort of off-and-on reopening from the pandemic, and this was the year they finally sort of officially reopened,” said Art Hogan, chief market strategist at B Riley Wealth in New York. “But the pace at which the economy has recovered from that has been disappointing.”

Analysts widely agree that China’s growth is downshifting from breakneck expansion in the past few decades.

Many believe Beijing needs to transform its economic model from an over-reliance on debt-fueled investment to one driven more by consumer demand.

Last week, China’s central bank head Pan Gongsheng pledged to keep monetary policy accommodative to support the economy, but also urged structural reforms to reduce a reliance on infrastructure and property for growth.

After years of over-investment, plummeting returns from land sales, and soaring costs to battle COVID, economists say debt-laden municipalities now represent a major risk to the economy.

Local government debt reached 92 trillion yuan ($12.6 trillion), or 76% of China’s economic output in 2022, up from 62.2% in 2019, according to the latest data from the International Monetary Fund.

In October, China unveiled a plan to issue 1 trillion yuan ($139.84 billion) in sovereign bonds by the end of the year to help kick-start activity, raising the 2023 budget deficit target to 3.8% of gross domestic product from the original 3%.

The central bank has also implemented modest interest rate cuts and pumped more cash into the economy in recent months.

Nevertheless, foreign investors have been sour on China almost all year.

Capital outflows from China rose sharply to $75 billion in September, the biggest monthly figure since 2016, according to Goldman Sachs.

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Samantha Morton calls for manslaughter charges over deaths of children in care

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Samantha Morton calls for manslaughter charges over deaths of children in care

Actor and director Samantha Morton has said councils who fail to prevent the deaths of children in care should face manslaughter charges.

Warning: This story contains references to suicide.

In a powerful interview with Sky News, the Oscar-nominated, BAFTA-winning actor and director, who grew up in care, said Britain’s care system needs to be “completely rethought”.

It comes after a Sky News documentary, A Girl Called Nonita, told the story of 18-year-old Nonita Grabovskyte, who died in the care of the state following a catalogue of failures by those responsible for her care.

Nonita took her own life on railway tracks in December 2023, just two weeks after her birthday. She had previously told doctors and social workers that she intended to kill herself as soon as she turned 18. But nothing was done to prevent her death.

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Unseen: A girl called Nonita

“I was a child of the state, just like Nonita,” Morton told Sky News.

“I was put in care at birth until I got the letter to say I was no longer the council’s responsibility. I was kicked out at 16 and put into a homeless hostel.”

After spells of homelessness, she found a local TV actors’ workshop and managed to secure roles that would eventually lead to Hollywood.

But she says she has never forgotten her childhood, which saw her in and out of children’s homes and foster families.

“The lack of care historically is shocking,” she said. “But the lack of care today is worse. Back then, it felt like there was at least some comeuppance.

“The system now is not fit for purpose. It needs root and branch reform. It needs to be completely rethought.”

The young people who grew up in care who have died in England since 2020

2020: 40

2021: 30

2022: 60

2023: 90

2024: 80

Source: Department for Education

The data shows a sharp rise in deaths among care leavers – young adults who have aged out of the care system and are expected to live independently, often with little or no support.

The Department for Education only began collecting data for care leavers aged 22 to 25 in 2023, meaning the true scale of deaths over the past decade is likely to be far higher.

Morton says councils should be held more accountable for the deaths of children in their care, especially if local authority failings contributed to deaths.

Pic: Invision/AP
Image:
Pic: Invision/AP

‘State manslaughter’

“A failure to care has massive consequences,” she told Sky News. “And the consequences are that people like Nonita die. I believe that that is a kind of state manslaughter.

“And individuals who fail to do their job properly should be in a dock.”

Education Secretary Bridget Phillipson has told Sky News that deaths of care-experienced young people should “shame us all”.

All deaths of children in the care of the state must be reported to the government via the Child Safeguarding Incident Notification Scheme.

But there are doubts as to whether all deaths are being reported.

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Phillipson: ‘Nonita was failed on so many levels’

‘Shames us as a country’

Ms Phillipson told Sky News she has asked officials to urgently review the process to check for underreporting.

“I’m concerned about serious incident notifications – about making sure we’re receiving all notifications of such incidents taking place,” she said.

“Because it’s only if we know what’s happening, if we fully understand what’s going on in the lives of children, that we as a government, as a country, can provide the support they need.”

Read more from Sky News:
PM vows to fight plots to oust him
Thousands of NHS staff to lose jobs

Ms Phillipson added: “It shames us all as a country that we so badly fail many of the most vulnerable children who’ve experienced such appalling trauma and abuse in their early lives.

“I read every single notification personally – and it always stays with you. Every case is a child or young person who deserved better.”

If you have been affected by any of the issues raised in this story, help, and support is available. You can call Samaritans free on 116 123 anytime day or night. You can also email jo@samaritans.org or visit www.samaritans.org to find support online.

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Sally Kirkland, famous for her Oscar-nominated roles in The Sting and Anna, dies aged 84

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Sally Kirkland, famous for her Oscar-nominated roles in The Sting and Anna, dies aged 84

Sally Kirkland, a former model and Oscar nominated actress known for her roles in films such as Anna, The Sting and JFK has died aged 84.

Her representative, Michael Greene, said Kirkland died on Tuesday morning at a Palm Springs hospice.

Kirkland had been unwell and struggling to cover medical bills after she fractured six bones last year and developed two life-threatening infections. She had also been diagnosed with dementia.

A GoFundMePage that was set up by her friends to help pay for her ongoing treatment had raised over £45,000 ($60,000).

Michael Douglas, left, and Sally Kirkland appear with their best actor Golden Globes for Wall Street and Anna. Pic: AP
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Michael Douglas, left, and Sally Kirkland appear with their best actor Golden Globes for Wall Street and Anna. Pic: AP

Her biggest role was in the 1987 film Anna, as a fading Czech movie star remaking her life in the United States and mentoring a younger actor.

Kirkland won a Golden Globe and earned an Oscar nomination alongside Cher in Moonstruck, Glenn Close in Fatal Attraction, Holly Hunter in Broadcast News and Meryl Streep in Ironweed.

Born in New York City, Kirkland was encouraged to start modelling at age five by her mother, who was a fashion editor at Vogue and Life magazines. Kirkland went on to graduate from the American Academy of Dramatic Arts in 1961.

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An early breakout for the star was appearing in Andy Warhol’s 13 Most Beautiful Women in 1964.

Sally Kirkland in 2015. Pic: Reuters
Image:
Sally Kirkland in 2015. Pic: Reuters

Some of her earliest roles were playing Shakespeare parts, including Helena in A Midsummer Night’s Dream and Miranda in an off-Broadway production of The Tempest.

She once told the Los Angeles Times: “I don’t think any actor can really call him or herself an actor unless he or she puts in time with Shakespeare.”

Kirkland was also infamous for her nude scenes, often disrobing in films and for social causes. In particular, Kirkland volunteered and advocated for people with AIDS, the homeless and prisoners.

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Thousands of NHS staff to be made redundant after funding agreed

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Thousands of NHS staff to be made redundant after funding agreed

Thousands of job cuts at the NHS will go ahead after the £1bn needed to fund the redundancies was approved by the Treasury.

The government had already announced its intention to slash the headcount across both NHS England and the Department of Health by around 18,000 administrative staff and managers, including on local health boards.

The move is designed to remove “unnecessary bureaucracy” and raise £1bn a year by the end of the parliament to improve services for patients by freeing up more cash for operations.

NHS England, the Department of Health and Social Care, and the Treasury had been in talks over how to pay for the £1bn one-off bill for redundancies.

It is understood the Treasury has not granted additional funding for the departures over and above the NHS’s current cash settlement, but the NHS will be permitted to overspend its budget this year to pay for redundancies, recouping the costs further down the line.

‘Every penny will be spent wisely’

Chancellor Rachel Reeves is set to make further announcements regarding the health service in the budget on 26 November.

And addressing the NHS providers’ annual conference in Manchester today, Mr Streeting is expected to say the government will be “protecting investment in the NHS”.

He will add: “I want to reassure taxpayers that every penny they are being asked to pay will be spent wisely.

“Our investment to offer more services at evenings and weekends, arm staff with modern technology, and improving staff retention is working.

“At the same time, cuts to wasteful spending on things like recruitment agencies saw productivity grow by 2.4% in the most recent figures – we are getting better bang for our buck.”

Health Secretary Wes Streeting during a visit to the NHS National Operations Centre in London earlier this year. Pic: PA
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Health Secretary Wes Streeting during a visit to the NHS National Operations Centre in London earlier this year. Pic: PA

Mr Streeting’s speech is due to be given just hours after he became entrenched in rumours of a possible coup attempt against Sir Keir Starmer, whose poll ratings have plummeted ahead of what’s set to be a tough budget.

Mr Streeting’s spokesperson was forced to deny he was doing anything other than concentrating on the health service.

Read more from Sky News:
Russian troops in Mad Max-style video

Shamima Begum ‘should be repatriated’

He is also expected on Wednesday to give NHS leaders the go-ahead for a 50% cut to headcounts in Integrated Care Boards, which plan health services for specific regions.

They have been tasked with transforming the NHS into a neighbourhood health service – as set down in the government’s long-term plans for the NHS.

Those include abolishing NHS England, which will be brought back into the health department within two years.

Watch Wes Streeting on Mornings With Ridge And Frost from 7am on Sky News.

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