Eating disorders often start at a younger age, but they don’t solely affect this population. Recognizing this, virtual eating disorder support company Equip announced Tuesday that it is now treating adults as well as adolescents. The company also announced an investment from General Catalyst, which helped expand its platform to adults. The amount was not disclosed.
“There is a very pervasive, really dense stereotype that eating disorders only affect 15- to 25-year-old thin, White girls,” said Dr. Erin Parks, chief clinical officer and co-founder of Equip, in an interview. “That is true, it does affect them. But it is not only them.”
She added that because so few people have access to treatment, many older adults have had their eating disorder for a very long time and need support.
San Diego-based Equip, which was founded in 2019, previously focused on those ages 6 to 24. The startup is now expanding to serve people of all ages. The virtual company operates in all 50 states and is in-network with several insurance companies, including Aetna, Elevance, Optum, Cigna and UnitedHealthcare. It connects patients with a care team that includes a therapist, dietitian, physician and peer and family mentor.
Different ages require different kinds of treatment, according to Parks. With its younger patients, the company uses family-based treatment, in which the family is brought in to help care for the patient. For adults, the company is using a method called enhanced cognitive behavioral therapy, which is a highly individualized treatment that addresses thoughts, feelings and behaviors affecting the patient’s eating disorder.
Parks said that when it comes to adults, individual treatment is often the best way to go because they may not have a support group. Sometimes when adults have been sick for a long time, they’ve “pushed away” a lot of their family and peers, or they may be too busy with work to build that support group.
There are other virtual solutions for eating disorders as well, including Arise and Within. Arise offers coaching with a care advocate who has lived experience with an eating disorder, therapy, nutrition counseling, group support and psychiatry. Within provides access to a care team that includes dietitians, therapists, nurses and peers.
The expansion to adults was powered by a recent investment by General Catalyst. In total, Equip has raised more than $75 million. With the funding, the company brought on a new president, Nikia Bergan. It also updated its technology and trained its providers in treating adults. In addition, it’s planning to use the funding to gain more Medicaid contracts, Parks said.
Equip considers itself an alternative to brick-and-mortar eating disorder treatments, which often require patients to stay at the treatment facility for a certain period. Parks said the benefit of a virtual program is that patients can be treated as they live their normal lives.
“[If you take] someone out of their life and give them a bunch of skills, then all of the sudden they plop back into their life and have all these triggers that they aren’t equipped to deal with,” Parks argued. “One of the great things about getting treatment while still being able to go to school, still being able to go to your job, still being able to parent your kids, is that you get to work with your providers on your real-life triggers as they come up.”
Parks is likely looking to replicate the positive results it claims to have achieved in the adolescent population in this new, adult population. In its annual outcomes report published earlier this year, the company cited that 81% of its adolescent patients reached or maintained their target weight within one year.
Photo credit: Bohdan Skrypnyk, Getty Images
The commercial market has been slower to adopt value-based care than the public market, but there are ways to move the process along successfully, executives said Monday.
During a panel at the Oliver Wyman Health Innovation Summit 2023 held in Chicago, healthcare leaders discussed the challenges and opportunities in advancing value-based care in commercial health plans. The panelists were Mark Hansberry, senior vice president and chief marketing officer of HealthPartners; Ellen Kelsay, president and CEO of Business Group on Health; and Tiffany Albert, senior vice president of health plan business at Blue Cross Blue Shield of Michigan.
Bloomington, Minnesota-based HealthPartners, which is an integrated healthcare organization serving more than 1.8 million members, has had some success with value-based care in the commercial space, Hansberry claimed. He shared five rules for scaling value-based care in the commercial market:
1. Payers and providers in a value-based arrangement need to have a shared understanding of what value is for patients, Hansberry said.
“You have to have a universal definition of what value means so that when clinicians look at you as a payer … they need to acknowledge that what you’re saying a clinical outcome is is actually a good clinical outcome, a good measure of performance,” he stated.
2. It’s important to ensure that the providers in the value-based arrangement are able to and willing to take the risk associated with value-based care.
“Most care systems weren’t built to actually manage risk,” Hansberry said. “That wasn’t their job. Their job was to take care of sick people. Now we’re asking them to do something else. How do you actually support those individuals on that journey?”
3. Payers need to support providers engaging in value-based care with “real-time, actionable data and consultation,” Hansberry said.
“It’s not just a data dump or a big Excel file that you pass over and you say good luck with it,” he stated. “Because, by the way, if they perform well in those value-based contracts, you do too as a payer. You want them to perform well. So you want to provide them with good, insightful, actionable data that’s risk-adjusted, that is connected to their practice — not just an amorphous health system — but to their practice so they can take action on those insights. But then you also want to supplement that with that consultation along the way.”
4. The incentives in the value-based contract must be aligned to “enable that [provider] to reap the benefits of the value that they’re creating for those members,” according to Hansberry.
5. Ultimately, a value-based contract comes down to trust between all the parties. But Hansberry noted that this is easier for HealthPartners as an integrated health system.
“We’re fortunate because we’re both a health plan and a care system,” he said.
He added that success in value-based care doesn’t happen overnight, which is partially why it’s difficult to scale.
“It takes time to build trust,” Hansberry stated.
Photo: atibodyphoto, Getty Images
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Top Chinese developers are quickly selling or downsizing their Australian operations amid a worsening property crisis back home.
Key points:
- Country Garden is the latest Chinese developer to withdraw positions in Australia
- China’s property meltdown has seen many developers forced to liquidate assets
- Analysts say the exodus of Chinese developers could impact housing supply, promising fewer high-density projects
Property giants such as Poly, Greenland, Yuhu, Wanda and Country Garden entered the Australian market in the 2010s with big ambitions, investing billions and buying and developing prime sites.
“It was literally for a period there week upon week, upon week there was a new entrant coming to the market,” former commercial real estate agent Mark Wizel told The Business.
“The decision-making was very sudden and very quick, however, at no point was it reckless … whether it was of state-owned enterprises, major developers or private developers.”
Mr Wizel, who has dealt with major Chinese developers in Australia, helped facilitate the boom.
“After 2013, a lot of the active Chinese capital moved more into income-producing assets,” he added.
“They moved into commercial office buildings, major shopping centres, and that really carried on the total from $8 billion of development site sales through to about $13 billion between 2009 and 2017, of total sales to mainland Chinese investors and developers.”
The retreat
One of the most high-profile transactions was One Circular Quay, a prime location with views across the Sydney Harbour Bridge and the Opera House.
It was bought by Wanda in 2014 for $425 million. The Dalian-based developer was eager to deliver a $1 billion project consisting of a 57-storey residential tower and a luxury hotel.
But with troubles emerging at home, there came an exodus.
Wanda sold One Circular Quay to another Chinese developer in 2018, and now it’s in the hands of Lendlease and Mitsubishi.
Greenland Australia sold a five-hectare Erskineville site in inner Sydney for $315 million in 2022.
The same year, Poly Australia pulled the plug on three projects in Sydney and Melbourne.
And now Country Garden is selling a portion (330 hectares) of the Sydney Wilton Greens project and a portion (150 hectares) of its Windermere estate in Melbourne.
The supply factor
Analysts say these sales will hold up development, impacting the number of new homes coming onto the market.
“Chinese property developers have had a tendency in the past to build high-density dwellings, the apartment towers, that’s what they’re extraordinarily good at,” property analyst Louis Christopher said.
“It does mean that those high-density towers that we actually do need, we’ll see less of those over the next two to five years.”
According to the data from the Bureau of Statistics, the number of dwelling commencements over the past 12 months is about 25 per cent lower than the long-term average.
Mr Christopher said the number of current dwelling approvals suggests commencements are about to fall further, to around 140,000 commencements (annualised).
“Based on our current population requirements, we need to build a minimum 200,000 to 250,000 dwellings a year,” he explained.
“The federal government’s five-year target of 1.2 million dwellings requires about 240,000 dwellings to be completed each year.
“What is in the pipeline is already behind schedule in terms what we need and what Labor has promised.”
‘Cash crunch’ back home
After almost two decades of a housing boom in China, Beijing introduced a series of measures to crack down on the sector, limiting the amount developers can borrower and reducing bad debt levels.
That caused the property bubble to burst.
“China’s property sector has contracted since the second half of 2021,” ANZ’s senior China economist Betty Wang said.
“This is the longest downtrend that we’ve observed since the late 1990s when China was trying to restructure the sector.”
Country Garden recently posted a record first half-year loss of $11 billion and is at serious risk of defaulting.
The world’s most indebted property developer Evergrande has lost more than 99 per cent of its share value and has recently filed for Chapter 15 bankruptcy protection in the US.
“The big developers are basically experiencing a bit of a cash crunch,” said Joseph Lai, chief investment officer at Ox Capital.
“So when they ran off or are running short on cash, one of the great ways to raise cash was to sell some of the assets — preferably in a market [where] they can still get reasonable value.”
Country Garden’s Australian branch Risland has told the ABC that depositors’ money is safe and is held in a trust fund.
Beijing forced to act
While Chinese developers say they’re committed to their projects in Australia, Beijing wants them to turn their focus back home.
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China’s property sector accounts for more than a quarter of its GDP.
The downturn has damaged the nation’s post-pandemic recovery and forced the Chinese government to act.
China’s central bank, the People’s Bank of China, recently announced several nationwide property-easing measures, exceeding market expectations.
Now home buyers in Tier-1 cities, including Beijing, Shanghai, Guangzhou and Shenzhen, can put down as little as a 30 per cent deposit on homes, compared to up to 80 per cent previously.
That saw a quick resurgence of home buying in some cities.
But economists say interest rates there are still too high.
“We do think that there is a need for China to continuously cut its policy rates,” Ms Wang said.
“By the end of this year, we’re expecting 1.7 per cent of China’s policy rates, and probably getting to the end of next year, the policy rates could be lowered to 1.3 per cent.”
There’s a chance that China’s property downturn will have some time to play out.
- Shadow banking — a term coined in the U.S. in 2007 — refers to financial services offered outside the formal banking system, which is highly regulated.
- China’s property sector, an estimated one-fourth of the economy, lies at the intersection of shadow banking, local government finances and household assets.
- Today, Beijing’s problem is it needs to offset a crackdown on shadow banking and real estate developer debt with other kinds of economic support.
Pictured here are models of a real estate development in 2005 in Shanghai, as China’s property boom was gathering steam.
China Photos | Getty Images News | Getty Images
BEIJING — China’s real estate problems have again drawn attention to the world of shadow banking and the risks it poses to the economy.
Shadow banking — a term coined in the U.S. in 2007 — refers to financial services offered outside the formal banking system, which is highly regulated.
In contrast, shadow bank institutions can lend money to more entities with greater ease, but those loans aren’t backstopped in the same way a traditional bank’s are. That means sudden and widespread demand for payment can have a domino effect.
On top of that, limited regulatory oversight of shadow banking makes it hard to know the actual scale of debt – and risk to the economy.
In China, the government has sought in the last few years to limit the rapid growth of such non-bank debt.
Developers were able to borrow liberally from shadow banks, bypassing limits on borrowing for land purchases.
Logan Wright
Center for Strategic and International Studies
What makes the country’s situation different is the dominance of the state. The largest banks are state-owned, making it harder for non-state-owned businesses to tap traditional banks for financing.
The state-dominated financial system has also meant that until recently, participants borrowed and lent money under the assumption the state would always be there to provide support — an implicit guarantee.
Estimates of the size of shadow banking in China vary widely, but range in the trillions of U.S. dollars.
China’s property sector, an estimated one-fourth of the economy, lies at the intersection of shadow banking, local government finances and household assets.
Real estate companies bought land from local governments, which needed the revenue and the economic benefits of regional development. People in China rushed at the opportunity to buy their own home — or speculate on property – as prices skyrocketed over the last two decades.
“Developers were able to borrow liberally from shadow banks, bypassing limits on borrowing for land purchases,” Logan Wright, Center for Strategic and International Studies’ Trustee Chair in Chinese Business and Economics, said in an April report.
“As a result, land prices continued rising, with developers then pushing up housing costs to maintain margins.”
According to Wright, Beijing’s recent restrictions on shadow banking pushed the always aggressive developers to turn to other sources of financing to repay existing shadow bank loans. He noted that meant developers started relying more on pre-sales of apartments to homebuyers — via mortgages — and slowing construction to save costs.
The deleveraging campaign that China’s leadership launched in 2016 to reduce systemic financial risks is the only logical starting point to explain how China’s structural economic slowdown began
Logan Wright
CSIS Trustee Chair in Chinese Business and Economics
Then the government cracked down on developers in earnest in August 2020 by setting limits on debt levels.
After decades of rapid growth, Chinese property giants such as Evergrande and Country Garden have successively struggled to repay debt. Their cash flows have dried up, largely due to falling home sales.
Almost simultaneously, news surfaced about trust fund Zhongrong’s inability to repay investors on some products. The fund had lent money to developers.
It’s becoming clear that at least a few of the struggling real estate companies had kept some debt off the books.
“Recent disclosures have raised questions about the lax controls and aggressive accounting practices of developers during the boom years,” S&P Global Ratings said in late August.
This summer, property developer Shimao revealed it owed far more debt than previously disclosed — unbeknownst to its former auditor PricewaterhouseCoopers, the S&P report pointed out. PwC resigned as Shimao’s auditor in March 2022.
“Some of those funds, those hidden debt were provided by the trust companies,” Edward Chan, a director at S&P Global Ratings, told CNBC in a phone interview.
“These trust companies were basically part of the shadow banking system in China.”
Trust funds sell investment products, typically to wealthier households.
As of end March, about 7.4% of trust funds’ value in China was exposed to real estate, the equivalent of about 1.13 trillion yuan ($159.15 billion), according to China Trustee Associations data cited by Nomura.
They estimate the actual level of developers’ borrowings from trust companies is more than three times greater — at 3.8 trillion yuan as of the end of June.
“Some trust products that were invested in the property sector may not have disclosed the actual use of funds or intentionally made this information less transparent to circumvent financial regulations,” the Nomura report said.
Banks in China also used trust companies to hide the true level of risk on their balance sheets, while making money by lending to restricted borrowers — such as property developers and local governments, said Wright from CSIS.
He estimated shadow banking represented nearly one third of all lending in China from 2012 to 2016 — and that after Beijing’s crackdown on the sector, China’s credit growth was cut in half.
Today, Beijing’s problem is it needs to offset a crackdown on shadow banking and real estate developer debt with other kinds of economic support.
“The deleveraging campaign that China’s leadership launched in 2016 to reduce systemic financial risks is the only logical starting point to explain how China’s structural economic slowdown began,” Wright said.
“China’s economic growth over the next 5 to 10 years will depend upon how successfully and efficiently the financial system can shift its resources away from property-related lending and local government investment projects toward more productive private sector firms,” he said.
“Otherwise, China’s economic growth rates will continue to slow over the next decade to 2 percent or below.”
John Lam, head of China property research at UBS, says the shantytown redevelopments contributed to an excess of supply, while Li says there was a failure to assess demand.
Country Garden, which narrowly escaped collapse in recent weeks, had built homes in cities where there was relatively little demand, Li says.
Across the country, she says there is now a “reality check as investors realise they cannot find tenants for the units”.
Loo says there is a lesson for policymakers across the world to avoid the mistakes made by the Chinese government.
“If there is a downturn and if policymakers want to really stimulate the economy, doing so via over-investment is probably not the right path to go,” she says. “This will lead to more severe structural issues down the road, which China is trying to unwind right now.”
Easing restrictions for first & second-time buyers
In an effort to boost demand, central and local governments have intervened to loosen some of China’s tough restrictions on property ownership.
Since 2015, the Chinese government trumpeted a mantra that “houses are for living in, not speculation” – but signalled a change in tone this summer.
Chinese leaders removed the slogan from the nation’s policymaking dogma at the end of July. Days later, China’s housing ministry announced plans to make it cheaper and easier to buy and said it would ease restrictions for people wanting to invest in a second home, according to CNBC.
Lam says the government has moved towards free market policies to shore up the real estate sector.
Local authorities have some freedom in setting their own rules but in recent weeks have started taking the lead set by Beijing.
Those who were not first-time buyers were previously required to have down payments as high as 80pc.
“Traditionally, this system has been to discourage second home ownership,” Loo says, adding that officials were concerned about speculative investment and the pricing out of first-time buyers.
The government has changed the rules so second-time buyers who do not own other properties can access the same down payments as first-time buyers. Second home owners remain subject to bigger down payment requirements.
Down payment requirements have also been lowered for first-time buyers. They used to be a minimum of 30pc of the purchase price but the floor has been dropped to 20pc.
China is speeding up efforts to resurrect the economy’s recovery and enhance the business environment as concerns about the economy’s growth forecast intensify. China’s efforts to kick-start a property sector revival are poised to have a substantial, positive impact on international stock markets and delight global investors, says the founder of one of the world’s largest independent financial advisory, asset management and fintech organisations.
The upbeat assessment from deVere Group’s Nigel Green comes as The People’s Bank of China eased borrowing rules and slashed the reserve requirement ratio for foreign exchange deposits from the current 6% to 4%. Some of the country’s largest banks also cut interest rates on yuan deposits.
Green says: “Global stock markets are set to get a boost amid the rollout of steps being taken by the People’s Bank of China (PBOC) to revive the country’s beleaguered property sector. We expect the decision to ease borrowing rules and cut reserve requirements for foreign exchange deposits, plus the cutting of interest rates on deposits will have a considerable positive impact on global stock markets as investors digest news that Beijing is being proactive on this critical economic issue.”
China’s property market had been facing a crisis marked by plummeting property prices, oversupply, and a debt-laden real estate sector.
This turmoil raised concerns not only for China’s domestic economy but also for global investors with exposure to Chinese assets.
“The global impact of China’s efforts to revive its property sector cannot be underestimated,” says Nigel Green.
“A healthy property market is a vital driver of economic growth. As China’s property sector stabilises, it will boost construction activities, create jobs, and stimulate related industries like cement, steel, and furniture. The resultant economic growth will have a positive spillover effect on global markets, especially for countries that rely on China as a major trading partner.”
Green continues: “China’s property crisis had dented investor confidence in the country’s markets. Therefore, by addressing the issue, China is sending a reassuring message to international investors that it is committed to maintaining stability and promoting growth.
Restored confidence will, we expect, lead to increased foreign investments in Chinese assets, benefiting both domestic and global portfolios. China’s property sector revival will offer new investment opportunities, both in the real estate market and related industries. Global investors looking for diversification and growth prospects can be expected to find China an appealing destination once again.”
Since the beginning of this year, Nigel Green has been publicly saying that Beijing will take the necessary measures to shore-up the world’s second-largest economy and that global investors “must not overlook the opportunities in China if they are serious about building long-term wealth.”
The deVere founder concludes: “Global financial markets will be buoyed by these measures that will stabilise the critically important Chinese property market, restore investor confidence, and stimulate economic growth.”
China’s weak economic recovery from three years of Covid restrictions, a crackdown on the private sector and an ailing property market underscores that the world’s second largest economy is entering a period of slower growth. That will create ripples around the world, especially for the multinational companies that rely on China as a major source of growth.
The country is already a source of angst for global companies.
‘s (AAPL) shares slid 3% on Thursday amid a report in The Wall Street Journal that China banned the use of iPhones by government officials at work as it engages in a technology battle with the U.S. and tries to reduce reliance on foreign technology.
The changing U.S.-China relationship comes as China’s economy falters and efforts to stabilize it have so far underwhelmed investors. Chinese policy makers are reluctant to use debt-fueled stimulus to revive its ailing property market. Chinese leader Xi Jinping has spent years trying to deflate a property bubble and rein in risks within shadow banking.
Though Beijing has taken some steps to relax payment restrictions and lower deposit rates nationally to woo home buyers, economists don’t see a return to a property boom. Instead, they see property, which accounted for a quarter of economic activity, to take up a smaller share over time.
More stimulus is likely to try to abate flagging confidence among companies, investors, and consumers, analysts say. Still, economists see slower growth. JPMorgan’s economists lowered their outlook for 2023 growth to 4.8%, down from 5%, and just 4.2% next year, down from its earlier projection of 4.7%. That slower growth will most directly impact neighboring emerging markets in Asia, with a one-percentage point Chinese GDP shock contributing to a 0.6% point hit to the rest of the region, according to JPMorgan.
It also creates challenges for global companies that have relied on China as an engine of growth, including commodity producers in Latin America and Australia. A Chinese property boom that fuels demand for metals like copper and steel now seems unlikely. Global automakers, industrial companies and consumer giants are also seeing weaker demand as Chinese consumers and businesses remain skittish about spending and competition from local players intensifies.
Orders for heavy machinery are slowing.
(ticker: CAT) noted that Chinese demand was worse last quarter than its already lowered projections. Geopolitical tensions with the U.S. are also pushing Chinese companies to reduce their reliance on foreign suppliers, a potential challenge for global industrial companies.
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Exporting rivals of China are also vulnerable as the yuan continues to weaken, now near 15-year lows versus the dollar. Economists expect China to let the yuan weaken further, albeit in a gradual and measured way, to help the competitiveness of its own exporters.
Instead of driving global growth by scooping up commodities, capital goods and consumer products, China’s shift toward slower growth could pose a challenge for foreign companies. A weaker yen will make Chinese companies more competitive in a host of areas, from technology to aerospace.
“This is the first time ever that a low-income country can produce tech at such a high level,” says Rory Green, head of China and Asia research for TS Lombard, noting China’s ability to produce seven nanometer chips and airplanes.
Barron’s looked for large multinational companies in the Stoxx 600 and
that broke out the share of revenue that came from China to find those that could get hurt by China’s weaker economy. Semiconductor-related companies like
(QCOM) dominate the list of companies with the most sales in China. But since the chips often go into products sold elsewhere, we excluded those and focused on other companies with more than 20% of sales from China.
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It isn’t an exhaustive list since some companies don’t break out China revenue and only offer revenue from Asia. But this offers a starting point for investors monitoring companies that could come under further pressure, especially if Beijing is unable to stimulate the economy enough to revive confidence.
Commodity producers, especially those making materials for property construction, could see slower demand.
(RIO) topped the list, with roughly half its revenue coming from China.
(AAL. London) and Chilean copper producer
(ANFGF) are getting a quarter and a fifth of sales from the country, respectively.
Industrial companies like
(MTD), which makes precision instruments and services, warned that Chinese demand has “deteriorated sharply” and that it sees lower sales for the remainder of the year.
Affected consumer-oriented companies include luxury makers like
(SWGAF) and
(CFRUY). If Chinese consumer confidence continues to take a hit, especially among higher-income households, trusts or wealth management products could come under duress.
German automakers like
and
are also vulnerable, not just from consumers wary of spending on big-ticket items but also as Chinese rivals like electric car maker
(BYD) gain share and pushes into Europe. A weaker yuan gives local rivals an additional competitive boost.
Write to Reshma Kapadia at reshma.kapadia@barrons.com
STORY: Chinese-constructed light rail begins commercial operation in Nigeria’s LagosDATELINE: Sept. 6, 2023LENGTH: 00:01:25LOCATION: AbujaCATEGORY: SOCIETYSHOTLIST:1. various of aerial view of metro train moving through Lagos2. various of train station3. various of commuters riding the trainSTORYLINE:Commuters who had long endured the challenges of overcrowded roads and prolonged commute time in Nigeria’s Lagos were visibly thrilled by the convenience, comfort, and speed of the city’s light rail which began commercial operation on Monday. As the train glided along its tracks from the iconic Marina Station on Lagos island down to Mile 2, a busy district in the city, many Lagos residents on board the China-built electric-powered light rail could not contain their delight. The air-conditioned coaches offered a stark contrast to the daily commuting struggles many had grown accustomed to. “With this train, there is no stress; we are able to move around. You can work with your time, and your mental health is intact now; gone are the days we complained about traffic and all of that,” said Farida Ahmed, a businesswoman who made the inaugural commercial ride on the Lagos Rail Mass Transit (LRMT) Blue Line corridor on Monday morning. “This is a great project, and will ease movement across Lagos,” she said. Undertaken by China Civil Engineering Construction Corporation in July 2010 and completed in Dec. 2022, the first phase of the LRMT Blue Line corridor spans 13 km and covers five stations. The LRMT Blue Line is the first rail infrastructure traversing Okokomaiko, a densely populated area in the western part of Lagos, and Marina. The new light rail will reduce travel time, improve the quality of life of citizens, and make Lagos one of the most resilient megacities in Africa, said Babajide Sanwo-Olu, governor of Lagos, at the commissioning of the project earlier this year. Taking a ride on the light rail Monday morning, Sanwo-Olu expressed his excitement by experiencing the inaugural commercial operation. “The users of this intracity rail would enjoy maximum security while on board the system.” The Chinese-constructed light rail project not only promises to ease the daily commuting woes of Lagos residents but also offers an environmentally friendly alternative to congested roads, as well as improve the lives of locals. Olusola Mustapha, a 22-year-old student at Lagos State University, described the commercial operation of the light rail as “the game-changer” while sharing her thoughts on the inaugural ride. “I cannot believe that we finally have a light rail in Lagos. The comfort and convenience are unparalleled, and I am looking forward to a stress-free commute from now on,” she said. The train system, which is expected to convey 175,000 passengers on a daily basis, will run 12 trips per day for a period of two weeks, and the service will gradually increase, according to Abimbola Akinajo, managing director of the Lagos Metropolitan Area Transport Authority.Xinhua News Agency correspondents reporting from Abuja.(XHTV)
China’s slowdown is actually helping the West
During July, falling demand for credit intensified among Chinese firms and households. Exports are down 15pc year-on-year, hit by the West’s cost of living crisis. And Beijing has stopped publishing data on youth unemployment, after the jobless rate among 16 to 24-year-olds topped 20pc.
Some say the Chinese economy itself is suffering from long Covid, with growth falling to 3pc in 2022 and a forecast expansion of 5.2pc this year. More than respectable elsewhere, these are low growth figures for China. And that’s raising concerns that the People’s Republic will cease being a major growth engine, causing the global economy to slump.
Such concerns have lately begun to crystallise. Hong Kong’s Hang Seng Index slid into “bear market” territory over recent weeks, down over 20pc from its previous peak back in January. The yuan just hit a 16-year low against the US dollar, prompting the central bank to spend heavily propping the currency up.
Now it’s all eyes on China’s vast real estate sector, accounting for 25 to 30pc of GDP – a major economic driver, given the extent of the construction and related services involved. But after years of fast growth built on local government and private-sector debt, the recent property slowdown has seen some big developers fold.
Property giant Country Garden is on the brink of collapse while heavily-indebted Evergrande just filed for bankruptcy protection in the US. With around 70pc of household wealth tied up in real estate, signs the property bubble could burst have hammered business sentiment, causing the world’s second-largest economy to stall. And that’s been noticed – with China’s woes now looming large over financial markets across the world.
During the global financial meltdown of 2008, China launched the largest stimulus package in history and was, under Hu Jintao, the first major economy to emerge from the crisis. President Xi, in contrast, has been reluctant to launch massive fiscal rescue measures.
One reason is that government debt, while the numbers are opaque, has spiralled above 140pc of GDP – much of it at the local government level. So the authorities have instead launched waves of smaller measures to boost demand – including less stringent mortgage conditions – as the Bank of China has slashed interest rates.
I read a research note last week claiming that China’s predicament is now “100 times worse than Lehman”, posing a much greater threat to global stability than the US banking and property sector before the 2008 collapse.
I’m not so sure. Ahead of 2008, US real estate was booming, with lots of homes bought on deposits of 5pc or less. So when an overvalued market started to turn, countless distressed sellers emerged who couldn’t afford their mortgage payments. That lowered prices even more – turning a lurch into a downward spiral.
Lending rules in China have typically set minimum down-payment ratios for first-time buyers up at 30-40pc in large cities, rising to 80pc for investors. That points to a residential property market less brittle than its 2008 US counterpart. And while the rules were recently eased, in a bid to boost confidence, first-time buyers and investors still require relatively stringent 20-40pc down-payments.
What’s more likely than a 2008-style collapse in China, in my view, is a drawn-out period of sluggish growth. China’s economic travails are being compared to Japan in the early 1990s, when its huge asset bubble burst, sparking a decades-long cycle of deflation and, at best, insipid economic expansion.
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