Best printers for Home

Best Mixer Grinder

Best wired Earphones

Best 43 Inch TV in India

Best Wi Fi Routers

Best Home Theatre in India

Smart Watch under 5000

Best Laptops for Education

Best Laptop for Students

Beijing [China], August 19 (ANI): The filing for bankruptcy by <keyword id="907612" type="General" weightage="20" keywordseo="Evergrande" source="Orion">Evergrande</keyword>, Chinese real estate giant signals the beginning of Beijing's real estate crisis, CNN reported on Friday. It serves as a cautionary tale about the "growth-at-all-costs" model that underpinned China's spectacular growth over the past 30 years. For decades, Evergrande, once one of China's most successful real estate developers, gobbled up debt as China's economy exploded. Demand for housing was so strong, homebuilders often pre-sold apartment units to buyers before construction was complete, CNN reported. But a sudden shift in policy by China's leaders two years ago has left the country's property developers scrambling for cash, compounding financial risks within the world's second-largest economy. As per CNN, the story of Evergrande's downfall began in 2021, when the central government moved to curb excessive borrowing to try to slow the rise in home prices, effectively cutting off a major source of funding for property developers. Evergrande, which had 300 billion USD in liabilities, couldn't shore up cash fast enough to make its debt payments. It defaulted in December 2021, triggering a market panic. A wave of defaults followed, and China's vast real estate market has yet to recover. The building was suspended on dozens of projects, leaving many "pre-sale" buyers left with no new home and a hefty debt burden, according to CNN. The steps that will be taken by Beijing to restructure billions of dollars in offshore debts have massive implications for China's financial system. Earlier on Thursday, Evergrande filed for Chapter 15 bankruptcy, which is a way for foreign companies to use US bankruptcy law to restructure debt. The process will take time, as Evergrande has roughly 19 billion USD in offshore debts. Evergrande's liquidity crisis was just the beginning of the pain. Other large builders in China have since defaulted as they struggle to shore up cash and demand for housing has fallen, CNN reported. Notably, investors around the world are watching the development cautiously as <keyword id="632496" type="General" weightage="50" keywordseo="country-garden" source="Orion">Country Garden</keyword>, which employs some 3,00,000 people, missed two payments on its multibillion-dollar debt and said it was considering "various debt management measures." The cash-strapped developer's debt is now seen as a "very high risk" asset, according to Moody's, which downgraded its rating on Country Garden last week, CNN reported. Country Garden has until early September to make the payments it missed. It's hard to overstate the importance of the property market in China. The industry accounts for as much as 30 per cent of the country's economic activity, and more than two-thirds of household wealth is tied up in real estate. But nearly three years of "Zero Covid" restrictions sapped China's economic growth, and consumers have been reluctant to buy new homes in the face of higher unemployment and falling property values, as per CNN. Notably, China's economic engines have been sputtering after a brief surge in activity earlier this year. Consumer prices last month fell for the first time in more than two years; youth unemployment has been rising so fast, Chinese authorities simply didn't release the July data. Retail sales, export demand and factory production are all down as well, CNN reported. While Beijing has made some efforts to help jumpstart demand for housing and free up cash for developers, the days of big, state-funded bailouts for bloated industries appear to be over. It also seems unlikely that China will bail these companies out. "We must maintain historic patience and insist on making steady, step-by-step progress," CNN quoted President Xi Jinping as saying recently. (ANI)

Evergrande's bankruptcy signals beginning of China's real estate crisis: Experts

<ul class="summary-list"><li>A Hong Kong court has ordered the liquidation of China Evergrande.</li><li>But experts say there may be little to recover.</li></ul>China Evergrande — the world's most indebted property developer — received a liquidation order from a Hong Kong court on Monday, but there may be little left to recover, said experts.The order came more than two years after Evergrande sent the <a target="_blank" href="https://www.businessinsider.com/china-housing-market-explainer-cost-debt-wealth-evergrande-impact-2021-9">country's property sector</a> into a tailspin.Liquidators will now take control of the company's assets and prepare to sell them in order to repay the company's debts, which total $300 billion.An offshore investor named Top Shine Global brought the <a target="_blank" href="https://www.reuters.com/world/china/china-evergrande-faces-winding-up-challenge-hong-kong-court-2023-10-29/">winding-up lawsuit</a> against Evergrande in 2022. Its proceedings were adjourned multiple times as Evergrande sought more time to restructure its debts.On Monday, Evergrande applied for another adjournment. But Judge Linda Chan said Evergrande had been unable to offer a concrete restructuring plan and ordered its liquidation."It is time for the court to say enough is enough," said Chan, according to <a target="_blank" href="https://www.reuters.com/business/embattled-china-evergrande-back-court-liquidation-hearing-2024-01-28/">Reuters.</a>Trading in the shares of Evergrande and its subsidiaries was halted on Monday following news of the order. Hong Kong-listed China Evergrande Group's stock price plunged 21% before the court hearing.Evergrande did not immediately respond to a request for comment from BI.Monday's court order is a far cry from Evergrande's heyday as China's <a target="_blank" href="https://www.mingtiandi.com/real-estate/research-policy/evergrande-chinas-2016-sales-king-as-top-developers-boost-performance-by-82/">top developer by sales in 2016.</a><a target="_blank" rel="" href="https://markets.businessinsider.com/news/stocks/china-property-crisis-evergrande-81-billion-loss-housing-economic-slowdown-2023-7">Evergrande</a> has been mired in a liquidity crisis since 2021. It first <a target="_blank" rel="noopener" href="https://markets.businessinsider.com/news/bonds/evergrande-default-fitch-rating-cut-china-junk-territory-overseas-bonds-2021-12">defaulted</a> on an offshore dollar bond in December of that year. The company <a target="_blank" rel="nofollow noopener" href="https://www.businessinsider.com/china-economy-evergrande-property-developer-chapter-15-bankruptcy-protection-2023-8?utm_medium=ingest&amp;utm_medium=ingest&amp;utm_medium=referral&amp;utm_source=markets&amp;utm_source=markets&amp;utm_source=yahoo.com">filed for bankruptcy protection in the US</a> in August and <a target="_blank" href="https://www.wsj.com/articles/evergrande-scraps-35-billion-restructuring-plan-as-chinas-housing-crisis-intensifies-5c2db979">scraped</a> a restructuring plan in October due to worse-than-expected property sales.<h2>'There are only losers in the collapse of Evergrande'</h2>Siu Shawn, Evergrande's CEO, told local media in China that the real-estate company will still ensure the delivery of homes in China, state-owned <a target="_blank" href="https://www.stcn.com/article/detail/1107129.html">Securities Times</a> reported on Monday.But several experts BI spoke to prior to Monday's court order said Evergrande's liquidation will be challenging.It's bad news for creditors, Mat Ng, the managing director at Grant Thornton, a professional services firm that specializes in restructuring, told BI."Given its scale, a liquidation of Evergrande would be a challenging process and the likely return to creditors would be expected to be low," said Ng.That's particularly since the Chinese property sector is <a target="_blank" href="https://www.businessinsider.com/china-economy-property-real-estate-crisis-white-list-bank-loans-2023-11">in the dumps</a> amid sluggish demand and falling home prices — which means any sale of Evergrande's assets is likely to be at fire-sale prices, John Bringardner, the head of Debtwire, a fixed-income data and news provider, told BI in November."At this point in the process, there are only losers in the collapse of Evergrande," Bringardner added.In July, Evergrande cited an analysis by Deloitte that estimated a recovery rate of 3.4% on its debt if the company is liquidated, per Reuters. Creditors now expect the recovery rate at less than 3%, according to the news agency.Investors also appear to be out of luck, particularly if they're outside of China, and the process of getting their investments may take years."Onshore stakeholders are busy working to ensure home purchasers will eventually receive the homes they have paid for one way or another, but retail 'mom and pop' investors in the company's offshore securities will be facing even further uncertainty and delay which would likely continue for years," Daniel Margulies, a partner at Dechert, a law firm that specializes in restructuring in Asia, told BI.The court order to liquidate Evergrande also signals that problems of this size in China "seemingly cannot be restructured and will likely end up in some form of liquidation, whether onshore or offshore," said Margulies.<h2>Evergrande's liquidation comes as China's economy continues to struggle</h2>Evergrande's liquidation comes as China's economy faces significant headwinds from a <a target="_blank" rel="noopener" href="https://www.businessinsider.com/china-real-estate-property-market-speculation-debt-crackdown-xi-jinping-2023-8?utm_medium=ingest&amp;utm_source=markets">property crisis,</a> <a target="_blank" rel="" href="https://www.businessinsider.com/china-economy-deflation-us-inflation-cpi-fed-rate-cuts-yuan-2023-12?utm_medium=ingest&amp;utm_source=markets">deflationary pressure,</a> and a <a target="_blank" rel="noopener nofollow" href="https://www.reuters.com/world/china/chinas-population-drops-2nd-year-raises-long-term-growth-concerns-2024-01-17/">demographic crisis.</a>Market sentiment over China's economy is so bad that the country's <a target="_blank" href="https://markets.businessinsider.com/news/stocks/china-stock-market-meltdown-brutal-year-explainer-whats-happening-2024-1?_gl=1*97kwue*_ga*MTM0MjM1NDU5My4xNjg1MTUzMTcw*_ga_E21CV80ZCZ*MTcwNjUwNDIyNy4zMzguMS4xNzA2NTA3MjQwLjU5LjAuMA..">stock markets sold down massively</a> last week as investors made a dash for the exit door.Despite the complications that could come with Evergrande's liquidation, there may be some upside in the longer run."Evergrande's liquidation is a sign that China is willing to go to extreme ends to quell the property bubble," Andrew Collier, a managing director at Orient Capital Research, told Reuters."This is good for the economy in the long term but very difficult in the short term," he added.

There may be little to recover in the $300 billion Evergrande debt saga

Chhath Puja 2024 Wishes

Bank holidays in India

ChatGPT will let you create images for free

Should the government give freebies to the poor?

World’s most powerful passports

Jio vs Airtel vs Vi Prepaid Plans

You Searched For "evergrande s bankruptcy signals" and got 2 results

Evergrande's bankruptcy signals beginning of China's real estate crisis: Experts

ANI

There may be little to recover in the $300 billion Evergrande debt saga

Huileng Tan,Nidhi Pandurangi

Popular Keywords

Buying Guides