Posted on 09/15/2021 11:20:21 AM PDT by RomanSoldier19
SINGAPORE/SHANGHAI, Sept 14 (Reuters) - China Evergrande is teetering between a messy meltdown with far-reaching impacts, a managed collapse or the less likely prospect of a bailout by Beijing for what was once the country's top-selling property developer.
Founded in Guangzhou in 1996, Evergrande has epitomized China's freewheeling era of borrowing and building, but with liabilities of nearly two trillion yuan ($305 billion) its possible collapse looms as one of China's largest for years.
Debt and land-buying curbs and hundreds of new rules have been imposed on Chinese developers over recent years as part of a push to cut financial risks and promote affordable housing.
Evergrande, which accelerated efforts to cut its debts in 2020 after regulators introduced caps, does not have any major offshore bond maturities until early next year but tardy payment of suppliers and interest on loans have brought to a head concerns that have long nagged at investors.
Now, without access to fresh funding, Evergrande cannot pay suppliers, finish projects or raise income, prompting it to hire advisors and warn of default risk. This, along with a buyout, break-up or bailout are the scenarios now being evaluated.
And while analysts have played down comparisons to the 2008 collapse of U.S. investment bank Lehman Brothers, which caused crises at counterparties and ultimately seized up global markets, some investors have similar contagion concerns.
(Excerpt) Read more at msn.com ...
It will be downplayed and covered up.
“land-buying”
All urban land in China is government-owned under the constitution of Communist China.
The leases on urban land are what are bought.
Those who live in “glass houses” (especially in states and cities run by Democrats) should not throw “stones”.
Members of the California legislature are trying to collapse the price of California housing and they may succeed.
I hate to see investors get f*!@ed, but if things like this are what’s needed to bring the real estate market to its knees so prices can come back to down to Earth, then so be it.
Don’t underestimate how much this will hurt China, as the government will be out a significant amount of money.
Repercussions will make things worse for other large firms.
It will hasten their need to swallow Taiwan.
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