this post was submitted on 29 Jan 2024
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  • A Hong Kong court on Monday ordered the liquidation of real-estate developer China Evergrande Group.
  • Evergrande is the world's most indebted developer with more than $300 billion of total liabilities.
  • It defaulted on its debt in 2021, sending China's struggling property sector into a tailspin.

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A Hong Kong court on Monday ordered the liquidation of China Evergrande Group, a move likely to send ripples through China's crumbling financial markets as policymakers scramble to contain the deepening crisis.

Evergrande, the world's most indebted developer with more than $300 billion of total liabilities, sent a struggling property sector into a tailspin when it defaulted on its debt in 2021.

That deepened a debt crisis in the sector and sparked many other company defaults in a damaging economic blow that to this day remains a drag on growth.

A liquidation ruling of the developer which has $240 billion of assets will likely jolt already fragile Chinese capital and property markets.

Beijing is now grappling with an underperforming economy, its worst property market in nine years and a stock market wallowing near five-year lows, so any fresh hit to markets could further undermine policymakers' efforts to rejuvenate growth.

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[–] Deceptichum@kbin.social 33 points 2 years ago (10 children)

It’s been almost a year now since this whole affair started, I wonder how much they’ve managed to soften the blow to the Chinese economy since.

[–] drmoose@lemmy.world 28 points 2 years ago (9 children)

China is great at sweeping the trash under the rug so my guess the blow will be quite minimal. I do wonder how will this affect Chinese investment culture and real estate has been the investment strategy forever. Now people are slowly realizing that nobody wants to buy or rent their shitty investment and all of it is ghost money.

[–] avidamoeba@lemmy.ca 2 points 2 years ago* (last edited 2 years ago)

I bet the CCP is going to make the homeowners whole at a minimum to avoid the risk of social instability.

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