Posted on 10/10/2023 11:34:38 AM PDT by george76
Chinese property developer Country Garden warned Tuesday that it cannot repay on time a 470 million Hong Kong dollar ($60 million) loan in the latest sign of distress after Beijing clamped down on mounting debts in the industry.
The company said in a filing to the Hong Kong Stock Exchange that it “expects that it will not be able to meet all of its offshore payment obligations when due or within the relevant grace periods,” including U.S. dollar notes the firm has issued.
The company said its sales were under “remarkable pressure.”
Country Garden earlier had been hailed as a model real estate company by Chinese authorities. It had avoided defaults on debt even as rivals such as China Evergrande, the world’s most heavily indebted property firm, defaulted in 2021 after the Chinese government began restricting borrowing by developers.
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Country Garden recently has received loans from some banks, such as a $50 million loan from China Minsheng Banking Corporation earlier this year, on top of a separate $280 million loan from the Hong Kong unit of the Industrial & Commercial Bank of China in December 2022.
Country Garden’s sales slumped nearly 44% in January-September from the same period a year earlier
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Country Garden had more than $180 billion in liabilities as of June. Evergrande has debts amounting to more than $300 billion.
Last month, a former Chinese official estimated that even China’s 1.4 billion population would not be able to fill all the vacant homes across the country. But housing construction is a major driver of the economy, fueling demand for materials, appliances and all sorts of products. Sales of land for development also are an important source of funding for local governments.
(Excerpt) Read more at apnews.com ...
Chinese are a SCAM , they grab the money and run
Last month, a former Chinese official estimated that even China’s 1.4 billion population would not be able to fill all the vacant homes across the country.
This comes just 2 months after China’s largest property developer, Evergrande, filed Chapter 15 bankruptcy.
Meanwhile, the Chinese HY Real Estate index is down ~85% from its high.
Something is happening in China.
We know that Blackrock had exposure to Evergrande. I wonder how much exposure Blackrock has to this company.
I saw a report that estimated China had built housing units sufficient to house 2.8 billion people.
China's economic policy is odd. They "invest" by building empty cities that they do not need and cannot use. I will note that Obama was also always "investing" by building infrastructure that was not necessarily needed here in the US.
Good investments "grow". Houses, roads, bridges do not "grow" and do not strike me as good investments (for the most part). Yes, the Erie Canal was a good investment. But a bridge to nowhere or an empty city doesn't do much for your future. But that's how China invests.
They’re shaking out the entrepreneurial excesses of the last couple decades.
“Something is happening in China.”
A lot of things are happening in China. Not many of them are good ever since Xi started moving back towards traditional communism and away from fascism.
We’re pikers compared to them, but our government is also big into pumping cash into industries, whether or not they’re technologically or financial viable
Observe the highlighted. Then think like and paraphrase Limbaugh. "American and European investors hit hardest...." Yup.
The sooner China gets back to 1959 the better off everyone will be.
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