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Having read the article but not heard of Evergrande prior to this, what are the implications of this outside of China? The article mentions that the company filed for bankruptcy in the US, but not what US operations/developments they had.
Why isn’t it down 100%? According to the article, they’re in bankruptcy with way more liabilities than assets. Presumably the shareholders are getting wiped out.
Why isn’t it down 100%? According to the article, they’re in bankruptcy with way more liabilities than assets. Presumably the shareholders are getting wiped out.
With Evergrande, I imagine some people believe it might be important enough for China that it may someday get a bailout. I don't believe it.
Earlier quoted context omitted.
Government needs to step in and investors need to write it as a total loss. Making people pay could collapse the entire economy.
Could someone key me in to this? I thought generally the Chinese government never shied away from stepping in and manipulating things. Recent trends (for example, the government blaming young people themselves for their low employment numbers) feels like they imported the bootstraps mindset from American politicians, which seems out of step with what was seen as them being rather direct in control of their economy. R…
A lot of what counts as government spending is actually the central government telling provinces and cities to spend. Except those also have heavy debt burdens after years of stimulus.
Very little central government money is trickling down. And the problem is not just that the developers are out of money, but their contractors have not been paid for months, those contractors have not paid their suppliers or workers for months, and down the line.
Earlier quoted context omitted.
Government needs to step in and investors need to write it as a total loss. Making people pay could collapse the entire economy.
Meh. I understand property is pretty much the only viable investment a person can make in China, but these investors should have known what they were buying. Makes me think of idiots that lost big in crypto. The bubbles value has already been spent, so someone is going to have to bag hold. Either the government should buy and forgive all the debt, or the investors should get fucked for overplaying their cards. Maybe…
The recent hard lines, with no sign of easing after multiple defaults, is a new thing.
Having read the article but not heard of Evergrande prior to this, what are the implications of this outside of China? The article mentions that the company filed for bankruptcy in the US, but not what US operations/developments they had.
Earlier quoted context omitted.
Well, caveat emptor but you can't exactly dunk on capital inflows consequence free.
A truly developing nation can't, the economic powerhouse of the 21st century has a lot more latitude in this respect. As long as not every single investment in it goes tits up, there won't be any shortage of dumb FOMO money chasing growth. (Look at the mountains of money piled into straight-up obvious crypto scams, at least China is full of real companies that are doing real business[1], even if sometimes that busine…
China has experienced the catch-up growth that it missed out on after 1949 in the past 3 decades or so. The trajectory of growth is less than for example, South Korea or Japan. The big difference being that China has more people.
Can someone explain to me why is this problem? The houses that they've built are still standing, people can still live in them, what's the problem?