Article

2021-10-11 China-Japan-Koreas

Beyond Evergrande, China's property market faces a $5 trillion reckoning

[FOX] China Evergrande Group, the embattled property developer, is the first high-profile real-estate company to run into serious trouble in Beijing’s campaign to tame a roaring property market.

It might not be the last.

As China enters what many economists say is the final stage of one of the largest real-estate booms in history, it is confronting a staggering bill: More than $5 trillion in debt that developers took on when times were good, according to economists at Nomura Holdings Inc.

That debt is nearly double what it was at the end of 2016 and is more than the entire economic output of Japan, the world’s third-largest economy, last year.

Global markets are braced for a possible wave of defaults, with warning signs flashing over the debt of about two-fifths of development companies that have borrowed from international bond investors.

Chinese leaders are getting serious about addressing the debt, with a series of moves meant to curb excessive borrowing. But doing so without torpedoing the property market, crippling more developers and derailing the country’s economy is quickly turning into one of the biggest economic challenges Chinese leaders have faced in years, and one that could reverberate globally if mismanaged.

Luxury developer Fantasia Holdings Group Co. failed to repay $206 million in dollar bonds that matured Oct. 4. In late September, Evergrande, which has more than $300 billion in obligations, missed two interest-payment deadlines for bonds.

Posted by Besoeker 2021-10-11 06:24|| || Front Page|| [11128 views ] Top
File under: Commies

#1 So where'd all the money go, then? The executives just steal it?

Posted by Omomolet Phutch9064 2021-10-11 10:06|| 2021-10-11 10:06|| Front Page Top

#2
#1 So where'd all the money go, then? The executives just steal it?
Posted by: Omomolet Phutch9064 2021-10-11 10:06

...That and/or the Party and Army are getting their cuts.

Mike

Posted by Mike Kozlowski 2021-10-11 10:43|| 2021-10-11 10:43|| Front Page Top

#3 In China, the Party and PLA are "the Big Guy"

Posted by Procopius2k 2021-10-11 11:09|| 2021-10-11 11:09|| Front Page Top

#4 So where'd all the money go, then? The executives just steal it?

Same place it went in all other bubbles - into the pockets of people who would not have been hired had the bubbles not existed, in the forms of salaries disbursed. Housing, raw materials, luxury goods - all are sectors inflated by the leverage-induced bubble blown by an absolute monarchy in egalitarian garb that will not tolerate any backtalk.

Posted by Zhang Fei 2021-10-11 15:01|| 2021-10-11 15:01|| Front Page Top

#5 So where'd all the money go, then?
Most of it was just imaginary anyway, same as everywhere. The connected get theirs back, the suckers get hit.

Posted by Glenmore 2021-10-11 15:32|| 2021-10-11 15:32|| Front Page Top

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