China Evergrande's liquidation process could be complicated, with potential political considerations, given the many authorities involved.
  • A Hong Kong court on Monday ordered the liquidation of real-estate developer China Evergrande Group.
  • Evergrande is the world’s most indebted developer with more than $300 billion of total liabilities.
  • It defaulted on its debt in 2021, sending China’s struggling property sector into a tailspin.

———

A Hong Kong court on Monday ordered the liquidation of China Evergrande Group, a move likely to send ripples through China’s crumbling financial markets as policymakers scramble to contain the deepening crisis.

Evergrande, the world’s most indebted developer with more than $300 billion of total liabilities, sent a struggling property sector into a tailspin when it defaulted on its debt in 2021.

That deepened a debt crisis in the sector and sparked many other company defaults in a damaging economic blow that to this day remains a drag on growth.

A liquidation ruling of the developer which has $240 billion of assets will likely jolt already fragile Chinese capital and property markets.

Beijing is now grappling with an underperforming economy, its worst property market in nine years and a stock market wallowing near five-year lows, so any fresh hit to markets could further undermine policymakers’ efforts to rejuvenate growth.

  • 50MYT@aussie.zoneEnglish
    134·
    9 months ago

    It’s a two sided attack.

    On one hand, their investment opportunities are limited. As a normal pleb the most they can do is buy an investment property. Stock market is pretty sketchy and limited to those with decent cash, so it leaves just real estate which is why so much gets pumped into it.

    Then on the other side you have population decline. China is literally fucked from old age people and the preference to having a son. More women there also don’t want to deal with the entitled little emperor, so they don’t get married also. Population is on track to hit 500bill in 2100 (down from 1.4T at its peak). All those billions missing don’t need apartments.

    When it falls, it’s going to be impressive.