{"id":1914,"date":"2021-09-28T05:54:31","date_gmt":"2021-09-28T05:54:31","guid":{"rendered":"https:\/\/depthtrade.com\/?p=1914"},"modified":"2021-10-09T16:29:29","modified_gmt":"2021-10-09T16:29:29","slug":"uk-and-china-energy-crisis-ahead","status":"publish","type":"post","link":"http:\/\/localhost\/depth\/uk-and-china-energy-crisis-ahead\/","title":{"rendered":"UK and China: Energy Crisis ahead"},"content":{"rendered":"\n

It is no longer just the worsening situation surrounding the real estate giant Evergrande Group that is weighing on the development of the Chinese economy. Now, an energy crisis is also emerging in Asia, which would result in further supply shocks in a wide range of sectors. Regarding the Evergrande Group, it should be noted at this point that, taking current events into account, this is probably only the tip of the iceberg.<\/em><\/p>\n\n\n\n

Fitch warns of far-reaching consequences of possible Evergrande collapse<\/strong><\/p>\n\n\n\n

As far as the Evergrande Group is concerned, it could well be the case that the major rating agencies determine a partial default of the Evergrande Group after the next twenty-five days have elapsed and for this reason, a “selective default” could be declared by Moody’s, S&P and Fitch.<\/p>\n\n\n\n

Contrary to current speculation among a number of (optimistic) observers, who assume that the impact of a default would be limited to the People’s Republic of China, the rating agency Fitch warns that a potential collapse of the Evergrande Group would have more far-reaching consequences from the perspective of the rest of the world.<\/p>\n\n\n\n

Semi-nationalization would only protect domestic investors<\/strong><\/p>\n\n\n\n

While interest-paying bonds among domestic bondholders were settled by the company last week, foreign bondholders literally looked down the barrel on Thursday last week.<\/p>\n\n\n\n

This development has led financial markets to wonder whether the Beijing government might not be considering<\/a> a “soft nationalization” of Evergrande Group in order to shield domestic bondholders and investors in so-called wealth management products (the country’s shadow banking sector) from financial turbulence, while foreign bondholders and investors could be left empty-handed.<\/p>\n\n\n\n

An energy crisis is threatening Asia – it has already arrived in the U.K.<\/strong><\/p>\n\n\n\n

This problem is now being supplemented by an energy crisis also emerging on the Asian continent. Should there be a supply shock on the local energy markets in Asia, as is currently the case in the UK, such a development would leave regional economic activity far from unscathed.<\/p>\n\n\n\n

Gasoline and diesel rationing occurred in the U.K. prior to the weekend, with many service stations in the country now subject to introduced tank-filling caps of 30 GBP per vehicle or customer.<\/p>\n\n\n\n

According to the British government, there is sufficient gasoline and diesel in the country, but the necessary transport capacities from the refineries to the service stations are currently not available in sufficient quantities.<\/p>\n\n\n\n

The result – as could hardly be expected otherwise – is that since Friday long lines have formed in front of the gas stations in Great Britain because panic buying has set in among private consumers.<\/p>\n\n\n\n

\n