China Evergrande Group last traded on the Hong Kong exchange on March 18, 2022 at 1.65 Hong Kong dollars ($0.13) per share, before being suspended on March 21.

The company also posted a loss of 39.25 billion yuan ($5.38 billion) for the six months ended June, with total liabilities of 2.39 trillion yuan.

  • JokeDeity@lemm.ee
    link
    fedilink
    English
    arrow-up
    37
    arrow-down
    3
    ·
    1 year ago

    It’s all a huge scam. They’ve been held together by the CCP for years only it’s now on public display just how much of a joke this is.

  • theodewere@kbin.social
    link
    fedilink
    arrow-up
    37
    arrow-down
    7
    ·
    edit-2
    1 year ago

    China is a funny place… they tend to just copy what they see on Western media… in this case they all watched Too Big To Fail, and decided it looked like a lot of fun… so they did that on a China sized scale, and the mess this causes is going to make 2008 look like an oyster fart…

    • ElegantBiscuit@lemm.ee
      link
      fedilink
      English
      arrow-up
      11
      ·
      1 year ago

      The difference between this and 08 though is that in 08, way too many people were allowed to buy houses that were already built, taking on debt they could not handle, and speculating to an insane degree on the health of those mortgages. A structural issue with no structural cure except to bail out individual homeowners who took on way too much debt which was never gonna happen. For evergrande (as I understand it) it’s just the property developer running out of cash to pay for the construction. The homes were already paid for, so at most the house buyers will just be either SOL or directly bailed out by the government for which there is a strong case to do so, and evergrande shareholders losing their investment is not really a big deal since they’ll probably be paid out in the bankruptcy. I feel like this whole thing is a really big parallel to Silicon Valley bank, for which all the doomers were out there peddling the impending collapse of the financial system which never happened.

      If anything is gonna bring down China it will be their demographic collapse, and that is impossible to fix and already manifesting. There is of course the usual argument of a huge tax base suddenly becoming a budget liability with a significantly smaller population of people to financially support them. But the big thing that will hit the private sector is the lower population causing rising labor costs which is driving away manufacturing, and the bulk of their entire industrial infrastructure is now set up for something they will no longer be very competitive in, and for a sector which young educated urban people don’t really want to work in.

      • Corkyskog
        link
        fedilink
        English
        arrow-up
        2
        ·
        edit-2
        1 year ago

        Aren’t they getting rocked by typhoons right now? How come I have only seen like one AP reference about it, kind of weird.

        Sorry… that was a huge tangent lol

    • AlteredStateBlob@kbin.social
      link
      fedilink
      arrow-up
      13
      ·
      1 year ago

      You joke, but when this all started to unravel two years ago, it actually did bounce. Not much, but it did. Was clear as day it’s going bankrupt, but then CCP stepped in and it all simply stopped.

        • huginn@feddit.it
          link
          fedilink
          English
          arrow-up
          4
          ·
          1 year ago

          Evergrande represents most of the working class savings for China as well, as if you ever have money to invest you buy real estate in China.

          • InverseParallax@lemmy.world
            link
            fedilink
            English
            arrow-up
            4
            arrow-down
            3
            ·
            1 year ago

            I’m sorry, but you’re not buying real estate.

            The government owns it, you’re buying a 99 year lease (at best) that the government might revoke at any time for any reason (such as they feel like it).

            There is nowhere in china to safely invest money, that’s the point of china.

            • huginn@feddit.it
              link
              fedilink
              English
              arrow-up
              5
              ·
              1 year ago

              The quibbling detail does not change the larger macroeconomic picture.

              If you’re in China the stock market is incredibly volatile. Buying property is the “safe bet” so everyone does it, often saving aggressively to buy.

              80% of urban households own, 20% own a second home as well.

              It doesn’t matter what the legal details are, in a broad sense the multi trillion dollar real estate industry going broke in a country that only invests in real estate is everyone’s problem.

              • InverseParallax@lemmy.world
                link
                fedilink
                English
                arrow-up
                2
                arrow-down
                1
                ·
                1 year ago

                Yeah, but 2 points:

                1: the stock market is completely fictitious which is why it is so volatile.

                2: only poors invest in chinese real estate, anyone with any real money invests in foreign real estate

    • nomecks@lemmy.world
      link
      fedilink
      English
      arrow-up
      59
      arrow-down
      2
      ·
      1 year ago

      Take deposits for housing and use it to solicit more deposits for housing, without actually building any useable housing.

      • Cheers
        link
        fedilink
        English
        arrow-up
        9
        ·
        edit-2
        1 year ago

        Just to add, they did start building, but they just started building as construction costs were increasing, so they ended up negative on all of their construction costs.

        Construction companies famously tore down fully built buildings because evergrande couldn’t afford them…

        • nomecks@lemmy.world
          link
          fedilink
          English
          arrow-up
          3
          arrow-down
          1
          ·
          1 year ago

          They built a pile of tofu dreg buildings that’ll all fall down inside of ten years.

    • HobbitFoot @thelemmy.club
      link
      fedilink
      English
      arrow-up
      7
      ·
      1 year ago

      They were one of several construction companies that built a ton of buildings in China fueled by municipal and corporate debt. It works great when the local economy grows.

      The Chinese economy has stopped growing at the levels to sustain the market conditions to pay back the debt. There are doubts that China could even get back to those levels of economic growth due to its aging population.

  • zepheriths@lemmy.world
    link
    fedilink
    English
    arrow-up
    7
    arrow-down
    1
    ·
    1 year ago

    If it was any other place it could be a good idea to look into exactly what it’s assets are. However land development companies in China don’t own the land, so in a debt to asset comparison they are horrible. That’s every land development company in china

  • Jocker
    link
    fedilink
    English
    arrow-up
    4
    arrow-down
    1
    ·
    1 year ago

    Schrödinger’s Stock Opening