Beijing — Two major Chinese property firms have defaulted on $1.6 billion worth of bonds to overseas creditors, Fitch Ratings agency said Thursday, as contagion spreads within the country's debt-ridden real estate sector. China's government sparked a crisis within the property industry when it launched a drive last year to curb excessive debt among real estate firms as well as rampant consumer speculation.
Companies that had accrued huge debt to expand suddenly found the taps turned off and began struggling to complete projects, pay contractors and meet both domestic and foreign repayments.
Real estate behemoth Evergrande has been the highest profile firm embroiled in the crisis, struggling for months to raise capital to pay off $300 billion in debt.
On Thursday, Fitch confirmed the company had defaulted for the first time on more than $1.2 billion worth of bond debt, as it downgraded the firm's status to a restricted default rating.
More at
https://shrtco.de/CNpeIw (scroll down to read)
Their top management are asset rich. They should sell their asset.
Now they pretend that they have no money, hopping that gov will bail them out!
Evergrande and Kaisa's debt problem is just the tip of the iceberg. These are the large ones, there will be smaller ones to come. The total debt of the property firms in China is about US$ 5 Trillion. This amount is 1.5 times China's Foreign Reserve of about 3.0 Trillion. Evergrande alone chokes up about US$300b which is about 10% of China's foreign reserve. The US$300B is already many times the foreign reserve of many Asian countries. It is unlikely that Evergrande could ever pay this debt especially when the property price in China is not as good as before.
https://www.theguardian.com/world/2021/o...ion-report
China is not like it used to be, an asset-rich country after Xi took over the regime and started taking up his ambitious and expensive OBOR plan. The % of China's assets in terms of Foreign Asset Held/Total Asset has been declining from 85% to the present 55% ever since Xi took over as the Chairman of CCP in 2016. It is still falling today. China did not spend lavishly to prop up its economy like many other countries during the Pandemic. It is unlikely to think China will do anything at all to save Evergrande and the other private property firms from the doldrums.
![[Image: bXWctNw.png]](https://i.ibb.co/FzCX157/bXWctNw.png)
(10-12-2021, 06:24 AM)revealer Wrote: [ -> ]China is not like it used to be, an asset-rich country after Xi took over the regime and started taking up his ambitious and expensive OBOR plan. The % of China's assets in terms of Foreign Asset Held/Total Asset has been declining from 85% to the present 55% ever since Xi took over as the Chairman of CCP in 2016. It is still falling today. China did not spend lavishly to prop up its economy like many other countries during the Pandemic. It is unlikely to think China will do anything at all to save Evergrande and the other private property firms from the doldrums.
The rich who wilfully jeopardize the country's economy should just fall and let others take over. Why must save them? So that they can endanger the country once again?
China property bubble start to burst....
Better run road before it is too late
No govt will save property market.
(10-12-2021, 07:08 AM)RiseofAsia Wrote: [ -> ]China property bubble start to burst....
Better run road before it is too late
No govt will save property market.
Those who bought Iskandar properties from chinese developers... really die pain pain
(10-12-2021, 09:36 PM)revealer Wrote: [ -> ]Evergrande is just a scam company devised to cheat the peasants of their hard earn money according to this twitter.
https://twitter.com/lengshanshipin/statu...59/photo/1
Evergrande, Hyflux and Noble Group are the same type of company, they depend on debt to stay alive. Every year used up what ever cash and have to borrow more the next year to pay off old debt and ever rising expenses.
It's just a mater of time.before it collapses.
In the past we used to have recessionsnlasting a few years to flush out such companies but these days central just print and pump throwing such companies one lifeline after another.
(10-12-2021, 09:36 PM)revealer Wrote: [ -> ]Evergrande is just a scam company devised to cheat the peasants of their hard earn money according to this twitter.
https://twitter.com/lengshanshipin/statu...59/photo/1
Highly leverage, surprising there are some foreign players invested in such risky bonds.
The collapse of Evergrande - Chinese regime on horns of a ...
https://chinaworker.info › en › 2021 › 10 › 17 › 30707
If Evergrande does mark a turning point, the beginning of a generalised crisis in China's property sector, this will have global repercussions. Blinken is trying to put pressure on the Chinese regime to safeguard the interests of the hedge-funds and Wall Street speculators, who have been buying these junk bonds.
Surprisingly the A-share and H-share markets didn't even blink today from the news.