China sees spiraling selloff as yuan near 16-year low - Here's what is happening

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retail sales, industrial output and investment growing at a slower-than-expected pace. China also has to contend with a deepening property crisis and concerns about potential spillover from payment woes of shadow banking-linked trust products. Zhongzhi – one of the country’s largest private wealth managers – recently fanned fears about financial contagion after facing a liquidity crisis.

The banking regulator has set up a task force to examine risks at the company as it makes plans to conduct debt restructuring. The Chinese shadow banking has hired KPMG LLP to conduct an audit of its balance sheet, people familiar with the matter told Bloomberg. Meanwhile, Country Garden Holdings Co.

– previously the nation’s biggest property developer – is on the brink of default after sales plunged and it failed to meet an initial deadline to pay coupons on dollar bonds. China's Cabinet said late on Wednesday that it would continue to widen policy room for expanding consumption, and strengthen policy coordination to meet this year's economic target. The government has already announced several stimulus measures and is reportedly mulling a cut in stamp duty on stock trades.

Weak consumer demand has tipped the world's second largest economy into deflation amid rising pressure on Beijing to deliver more stimulus to support the economy. The outlook for China’s economic growth is dimming, with investment banks around the world cutting their 2023 forecasts. Four major brokerages recently cut China's economic growth forecast for the year as worries about contagion from debt repayment troubles at its top private property developer Country Garden deepened.