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CHINA

Borrowing costs rise on back of China growth fear

Spanish short-term borrowing costs rose sharply on Tuesday, reflecting market concerns over China and over US monetary policy which Spain's finance minister said posed a risk to its economic recovery.

The Spanish treasury said it raised €3.075 billion ($4.03 billion) in sovereign bills of three and nine months' maturity on Tuesday, surpassing its target of two to three billion euros.

But the rate of return demanded by investors rose compared to the last comparable sale on May 21 — a sign of weakened confidence in Spain's financial strength.

The rate nearly tripled on the three-month bill, rising to 0.869 percent from 0.331 percent.

On the nine-month bill the rate rose to 1.441 percent from 0.789 percent.

Spain, the eurozone's fourth-biggest economy, has seen its borrowing costs generally ease this year after it resisted pressure to reach out for a sovereign bailout in 2012.

"The Spanish treasury's situation is much more comfortable now than what it was just a few months ago," said Finance Minister Luis de Guindos at an economic conference on Tuesday ahead of the sale.

But analysts' warnings over China's economic growth and its banks, plus the looming withdrawal of monetary stimulus measures by the US Federal Reserve, caused European stock markets to slump on Monday.

"Times of change in direction in monetary policy are always delicate," Guindos warned.

"They introduce volatility in the capital markets, which if not duly controlled can derail the recovery that we are undergoing."

Spain's soaring borrowing costs last year raised fears for the overall stability of the eurozone.

"Europe is no longer a problem for financial stability. It is no longer in the eye of the storm," Guindos said on Tuesday, however.

He said that Spain's economic output and employment figures would improve in the current quarter.

"The question now is not whether the Spanish economy is going to recover. The fundamental question is how strong the recovery is going to be."

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FOOTBALL

Wu Lei’s move to Spain’s ‘Liga’ is ‘massive’, says ‘China’s Beckham’

Wu Lei's transfer to La Liga is "massive" for Chinese football, says a former international who made a similar journey 19 years ago and helped convince the forward to take the plunge in Europe.

Wu Lei's move to Spain's 'Liga' is 'massive', says 'China's Beckham'
Espanyol's unveiled its new Chinese forward Wu Lei on January 29, 2019. Photo: AFP

Xie Hui knows what it is like to venture out of the relative obscurity of Chinese football and make a success of it, having scored goals in Germany's second division.

Now 44 and retired from playing, Xie also knows Wu better than most after working with him for the last few years at Chinese Super League champions Shanghai SIPG.


Xie Hui looking on during an AFC Champions League group stage football match last week. 

Wu left SIPG, where Xie is an assistant coach, for Espanyol in January for a reported €2 million ($2.25 million) and made history this month when he became the first Chinese to score in Spain's top league.

Few Chinese have played among Europe's elite, but Xie told AFP that 27-year-old Wu can make as much of an impact — if not more — as Sun Jihai, who was at Premier League Manchester City from 2002-2008.

“I have no doubt that he has the capability to play in a top league, in a decent team,” Xie said of last season's CSL top-scorer.   

“He always had this dream so he would talk to me and say, 'Oh, but what about the language?' But football is a common language.   

“I told him not to worry, the most important is on the pitch and the training ground. They will respect you if you show it on the pitch, it's as simple as that.”

Xie, who once earned comparisons to David Beckham, because he was married to an actress/model, sent Wu a message of congratulations after his landmark goal in Chinese-owned Espanyol's 3-1 win over Real Valladolid.   

Wu's progress is being closely monitored in China and millions back home will watch the broadcast of Espanyol's city derby with Lionel Messi's Barcelona on March 30.

“It's massive, massive, and something we missed for almost the last 15 years,” Xie said of what Wu's move meant for the development of Chinese football.

Need for speed

Like Wu, Xie was a forward, and after starting his career at Shanghai Shenhua, he moved to Alemannia Aachen in Germany's second tier in 2000.   

Xie hit 20 goals in 52 games and attracted the attention of teams in Germany's top flight, before returning to Shenhua in 2002.   

He had two further stints in Germany, before retiring in 2008.   

Xie, who scored nine goals in 22 appearances for China, warned that Wu will need to be patient and “speed up his mindset” in Spain.   

“Pace and physically, he has no problem,” Xie said.   

“But the CSL is much slower, he had much more time, two seconds in front of the goal. But maybe in Spain, you have just one second.”   

Xie, who has worked under the “unique personalities” of Sven-Goran Eriksson, Andre Villas-Boas and now Vitor Pereira at SIPG, is confident Wu will succeed in La Liga.

But he is less optimistic about the immediate future of Chinese football.   

“I do not see that many (like Wu Lei), I would say another one or two, and that's it of that generation,” he warned.   

That dearth of quality hurts the national side, who have qualified for the World Cup only once, in 2002.

So what hopes of reaching Qatar 2022?   

“That will be a miracle, I would not bet over 50 percent,” said Xie.

“From my understanding it will come, but later, at least 10 years from now.

By AFP's Peter Stebbings 

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