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.

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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.

  • Dr. MooseEnglish
    31•5 months ago

    China is great at sweeping the trash under the rug so my guess the blow will be quite minimal. I do wonder how will this affect Chinese investment culture and real estate has been the investment strategy forever. Now people are slowly realizing that nobody wants to buy or rent their shitty investment and all of it is ghost money.

    • @[email protected]English
      8•5 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.

      • Dr. MooseEnglish
        7•5 months ago

        Yeah but when you have a dictatorship you can make people who complain disappear.

        So some poor dumdums will be left holding the bags, a few sent to organ harvesting prisons and then rince and repeat. As long as the peasants feel a bit richer every year and the local infra is getting built nobody dares to complain.

    • Avid AmoebaEnglish
      2•5 months ago

      I bet the CCP is going to make the homeowners whole at a minimum to avoid the risk of social instability.