- cross-posted to:
- world@lemmy.world
- cross-posted to:
- world@lemmy.world
Chinese property giant Evergrande’s shares were taken off the Hong Kong stock market on Monday after more than a decade and a half of trading.
It marks a grim milestone for what was once China’s biggest real estate firm, with a stock market valuation of more than $50bn (£37.1bn). That was before its spectacular collapse under the weight of the huge debts that had powered its meteoric rise.
Experts say the delisting was both inevitable and final.
This should be huge news, but I expect you’ll barely see a ripple. A company with $45b in debt is being foreclosed on. This should have all kinds of knock on effects.
However I fully expect it to just disappear.
It’s been pretty much party line that they want this to happen for some time now. Pooh bear famously made this houses are for living in speech and directly wanted to knock out speculation. They do not want to be the West and define themselves by asset prices rising with no relationship to productivity. What the West would view as a major crisis then is the CCP’s intended effect. They specifically targeted these highly leveraged developers with the theory (correct in my opinion) that the loans themselves are what are driving this “growth” and it’s largely creating a situation of extraction that’s pricing out regular Chinese from housing. Even making noises in that direction would seriously spook Western housing prices. Harris’s solution was famously increasing lending if you remember.
I’m not sure I follow what you’re saying, but it sounds like…
The CCP plan was:
Sounds like profit to me, houses and buildings got built, rent and housing prices are going down. Sucks for the megacorp though.
Not really. What they identified was
This is the financialized model that pretty much drives the western economy. China rightfully saw this as undesirable and put limits on how much developers could borrow based on assets. And this is the result. Realize that many of these loans were foreign investments.
https://en.m.wikipedia.org/wiki/Three_red_lines
Just my speculation but this policy might be a significant contributing factor to the growth of Chinese economy.
Rising prices of assets lock up money that would otherwise be used for more productive investment.
Trading in Evergreen was closed already 1½ year ago, when the company entered liquidation.
So the delisting was inevitable and is not really significant.
Wound up means liquidation.
But yes people and banks have absolutely lost money on this, but the ripple effect started already before the liquidation, it’s been going on for at least 2 years now.
But for a country of 1.3 billion people, $45 billion is only $35 per capita, so not something that will likely destroy an economy as big as Chinas.
thanks. my first thought was that this had basically already happened.
Here’s the thing, they can sweep this one under the rug but this is just a symptom. There will be more.