Cracks in China’s economic armor

WHILE the attention of the Philippines recently has been understandably focused on the apparent explosion of construction activity being carried out by China on disputed shoals in the West Philippine Sea, a “told you so” moment in the Chinese economy has captured the attention of the global business media in the past few days.

Earlier this week, property developer Kaisa Group Holdings Ltd. became the first Chinese company of any consequence to default on its dollar-denominated debt, after a 30-day grace period on $52 million in missed interest payments expired. Altogether, Shenzhen-based Kaisa is saddled with a 65 billion yuan (about $10.5 billion) debt that it may not be able to repay, according to a Bloomberg report.