Concerns grow over property crisis in China
Chinese property developer Evergrande Group has filed for bankruptcy protection, leading to growing concerns about a property crisis in China spreading, with potentially serious consequences for the wider economy there.
It said in a statement that this move was “a normal procedure for offshore debt restructuring” and that it would push forward with the restructuring of its debts. Reuters said it had been in negotiations with creditors for more than 18 months and that its debt restructuring involves more than $30 billion of offshore debt.
This has had an impact on other property developers in China and there are reports of housing developments in different parts of the country being left unfinished and of suppliers going unpaid.
Bloomberg named Country Garden as another property developer that was now in danger of “meeting the same fate” as Evergrande as a result of being unable to sell enough homes. It is now “quickly running out of cash”, the business media outlet said.
It said fears were now increasing of a housing downturn affecting other parts of the financial system and the wider Chinese economy.
Image: Evergrande.
