Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

China’s property giant Evergrande files for bankruptcy protection in Manhattan

cnbc.com

Post reply on HN
Print view View original

251–260 of 395 posts

Re: China’s property giant Evergrande files for bankruptcy protection in Manhattan

#251

Post by ethbr1 »

anovikov wrote: post #244
ethbr1 wrote: post #234

Earlier quoted context omitted.

For counterexamples of the primacy of money, see also: North Korea, Iran, Russia, Pakistan. You have to have bases of power, who are compensated and secured. It's less stable, but doable with the right mix of alternatives, to ignore "the people" as one of those bases of power.

Idk how you can include any of those but North Korea in the list (North Korea only exists because China secures it). Russia at least, is a good example of the opposite: give people chance to earn and invest money and enrich themselves and they will give no shit about even the most ridiculous things government does. Soviet Union has collapsed while having whole lot more economic power and raw output of just about ever…

Those are all countries in which I'd hazard a free and open election, without a thumb on the scales and voted in by all citizens, would topple their governments.

Your description of Russia seems accurate, ~1995 to ~2010.

However, policies appear to be changing into tighter, more direct state control of oligarchs, in an effort to ensure civil stability.

Additionally, Putin is now 70... which is getting to the age that more laissez faire dictators turn increasingly autocratic in response to any external disturbances of their social control.

At some age and tiredness, it seems like the blunt approach trumps finessing a solution between multiple competing interests.

And... not to put too fine a point on it, but Putin did just survive a coup attempt, which wouldn't have launched if there weren't some support for it among the myriad power brokers in Russia.

Re: China’s property giant Evergrande files for bankruptcy protection in Manhattan

#252

Post by woooooo »

oblio wrote: post #149
throwawayqqq11 wrote: post #123

Earlier quoted context omitted.

The US is chasing hegemonial "interests overseas". Every other country, that tries to develop a sovereign position in too many industrial sectors contradicts that. Thats how the US justify their industrial/political espionage on basically all their "allies".

LOL at accusing the US of industrial espionage in a discussion about China :-)) Nota bene, I'm convinced the US is spying. It's just what China is doing in terms of spying and forced industrial transfer makes the US stuff look kiddie play.

If that's true, it just means we're losing our edge.

I'd say we're still tied, personally. Arizona and mainland China are both getting a TSMC plant.

Re: China’s property giant Evergrande files for bankruptcy protection in Manhattan

#253

Post by Havoc »

renegade-otter wrote: post #37
jamesaurichs wrote: post #18

Some real estate related news from China: - Country garden, China's second biggest property company after Evergrande, missed a mere 22.5M payments for dollar denominated bonds. It is trying to restructure a $340B debt owned. https://abcnews.go.com/Business/wireStory/chinas-government-... - Li Ka Shing, richest man in Hong Kong, just offered an immediate 30% off on his newest buildings for sale - One of China's bigges…

"China's sliding yuan could be next 'black swan event' for markets, hedge fund EDL says": https://www.reuters.com/markets/currencies/chinas-sliding-yu... It would be interesting to see the blast radius, specifically in terms of countries like Russia, which is becoming increasingly dependent on the yuan as it is exiting its relations with the West , huffing and puffing: https://carnegieendowment.org/politika/88926

> the blast radius,

Global economy is the blast radius. China is the biggest economy by trade so it’ll ripple through everything

Re: China’s property giant Evergrande files for bankruptcy protection in Manhattan

#254

Post by wenyuanyu »

seanmcdirmid wrote: post #241
wenyuanyu wrote: post #220

The Chinese government's approach to dealing with failing real-estate companies, including Evergrande, is distinct from typical Western bailouts. In China, the strategy often involves allowing such companies to default in a controlled manner. Given that the major lenders and banks are state-owned , this essentially means that the government bears the loss through these institutions (what else can happen anyway??) . A…

They also trade it in the market, and anyone who tried to raise warning bells early is censored. Andrew Left got banned from trading in HK in 2016 because he said the company was doomed. We’ve known for a long time that Evergrande was in serious trouble, that was 7 years ago, and the Chinese government’s solution was to look for suckers who would listen to them rather than look at the numbers.

It is like keep the ball rolling for as long as possible. Pretend everything is fine is what people do, for other governments as well...

Re: China’s property giant Evergrande files for bankruptcy protection in Manhattan

#255

Post by 0xDEF »

bohadi wrote: post #191

The 200$ billion hole in CN real estate is comparable in size to the SVB signature US banking crisis. In that case US treasury policy was a bailout for uninsured depositors who are wealthy supporters of the ruling blue party. Most of the underwater property developers are wealthy patrons of the ruling red party in China and will ultimately receive similar government bailouts. Privatized gains and socialized losses it…

>In that case US treasury policy was a bailout for uninsured depositors who are wealthy supporters of the ruling blue party.

I really doubt that David Sachs, Peter Thiel, and other wealthy right-libertarian VC bros support the "blue party".

Re: China’s property giant Evergrande files for bankruptcy protection in Manhattan

#256

Post by jacquesm »

throwawaylinux wrote: post #250
wenyuanyu wrote: post #220

The Chinese government's approach to dealing with failing real-estate companies, including Evergrande, is distinct from typical Western bailouts. In China, the strategy often involves allowing such companies to default in a controlled manner. Given that the major lenders and banks are state-owned , this essentially means that the government bears the loss through these institutions (what else can happen anyway??) . A…

> They are often required to return these funds to China, potentially under threat of reduced prison sentences. This sounds not right... but yeah... it is China. And China does not have other means to use like US to extradite fugitives or request the money back even it got all the evidence... exit-ban and blackmailing are the only way China can go... How is this different from western governments? Can the state even…

They also:

- execute people

https://www.bloomberg.com/news/articles/2021-01-29/china-fin...

- blackmail people by targeting the family members of those that have moved abroad aka collective punishment

https://www.economist.com/china/2023/02/14/how-chinas-police...

- are on the take themselves in a way that makes all of this other stuff look like peanuts

I take it that doesn't need a source link.

- make people disappear

https://www.bbc.com/news/business-64781986

It's not as if we're looking at a democratically run country where there is a failure of a private institution, there is absolutely no way that you can run something at the level of Evergrande without being 100% in bed with the authorities.

The hypocrisy is at a level that is hard to imagine, you're essentially looking at two arms of the same thing where the one is labeled 'Evergrande' and the other is labeled 'CCP' and the one arm made the other look bad so there will be reckoning. Looking at this through the lens of a Western democracy in terms of the crimes committed isn't going to help.

Re: China’s property giant Evergrande files for bankruptcy protection in Manhattan

#257

Post by jacquesm »

AnthonyMouse wrote: post #29
ipnon wrote: post #5

There are many real estate giants and so-called "trust" companies who are incapable of repaying debt right now. Some of these companies have trillions in RMB on their balance sheets. The central bank can bail them out but at the expense of the assets of the middle and lower class. This would only further incentivize cash hoarding, and tighten the middle income trap. It is not an enviable situation.

Are they actually underwater or do they just have higher loan payments than rental income? If it's the latter, let them sell some properties or transfer them to the bank in lieu of loan payments.

They are so far under water that there simply are no buyers, at all, and there likely never will be buyers. A lot of this construction was just to keep the wheels spinning. There are entire cities that are empty.

Re: China’s property giant Evergrande files for bankruptcy protection in Manhattan

#258

Post by nradov »

bartvk wrote: post #216
AnthonyMouse wrote: post #121

Earlier quoted context omitted.

They don't have to be worth book value to be worth more than the outstanding loan principal. This is also why it can make sense to pay the bank in real estate. The bank doesn't need to sell it immediately because they don't need to pay a mortgage so they can just sit on it and collect rental income until they can find a buyer. Another alternative is for the real estate trust to sell new shares into the market and use…

Does this actually happen? A bank that owns real estate and collects rental income on it?

That happens all the time in the US and other countries. Banks typically try to sell off those repossessed real estate assets fairly quickly because they aren't really in the landlord business, but when there's a supply glut they may have to hold for several years.

Re: China’s property giant Evergrande files for bankruptcy protection in Manhattan

#259

Post by misja111 »

bakuninsbart wrote: post #94
throwaway2037 wrote: post #85

Earlier quoted context omitted.

Some of these companies have trillions in RMB on their balance sheets. I don't understand this sentence. It is nonsensical to use balance in this way. You wrote "trillions in RMB". Let's assume (your hand-wavy use of the term) balance sheet means: outstanding debt. Further, each 1T RMB is 137B USD. How many companies in the whole world carry more than this much debt? Let alone Chine property developers? Wildly overst…

From a quick google Evergrande (officially) has 2.4 trillion Yuan in debt, and 1.7 trillion Yuan in assets. Assets seem to have lost more than 20% of their value since 2019. It is the largest one of the Chinese real estate developers, but there are a couple others that might break through the 1T Yuan mark.

> .. and 1.7 trillion Yuan in assets

Note that this is the book value. Probably based on some valuation from years ago and only minimally adjusted, mean while property prices have crashed.

Re: China’s property giant Evergrande files for bankruptcy protection in Manhattan

#260

Post by thechao »

AnthonyMouse wrote: post #121
lmm wrote: post #78

Earlier quoted context omitted.

Who says those properties are worth their book value? This is how a crash happens these days - distressed asset holders forced into fire sales of the assets themselves, lowering asset values and putting more of the holders into distress.

They don't have to be worth book value to be worth more than the outstanding loan principal. This is also why it can make sense to pay the bank in real estate. The bank doesn't need to sell it immediately because they don't need to pay a mortgage so they can just sit on it and collect rental income until they can find a buyer. Another alternative is for the real estate trust to sell new shares into the market and use…

Until people demand their RMB, and all the bank has is piles of building materials…
Post reply on HN