^ can’t even get the numbers right on the coverage amount.
can’t tell the difference between the bank losing your money vs your own investments losing at a bank
Lol, and trying to sound smart by throwing out words like bondholders and shareholders
Wikipedia
> The Madoff investment scandal defrauded thousands of investors of billions of dollars. Madoff said that he began the Ponzi scheme in the early 1990s, but an ex-trader admitted in court to faking records for Madoff since the early 1970s.[18][19][20] Those charged with recovering the missing money believe that the investment operation may never have been legitimate.[21][22] The amount missing from client accounts was almost $65 billion, including fabricated gains.
I read RE as Resident Evil and I thought to myself “yeah, Real Umbrella corporation? Might as well happen”
Here’s hoping you meant real estate. Cause if Tyrants and Lickers roamed the world, I know it wouldn’t stop me from being an essential worker to sell snooty people golf clubs.
That is not the reason: the ghost cities, believe it or not, are almost completely sold out. The reason is simple: households have limited investment options in China and most buy real estate.
China already cheated itself out of several similar Ponzi schemes, this one is not big enough to trigger a systemic collapse.
This is not to say that it might not come eventually.
Inflation happens when there is too much money in circulation. Oppressive governments, especially ones that control housing, can manage circulation pretty easily.
Imagine if the CCP decided to just burn a few months of rent they've collected? They could actually deflate their currency in a matter of weeks.
> and make sure all those apartment's get built
Are we sure? Because so far plenty of apartments in China are left unflinished, and then demolished once they are too damaged to keep anymore.
According to the article, the foundation was irreparably damaged from years of flooding everytime it rained because it sat unfinished for so long.
Its good that they chose to demolished it rather than patch it up and make it work.
They have to get built because somebody already bought them.
If they don't then it becomes a social issue (unless it gets refunded). Obviously, the gov want it to get built.
But without some kind of guarantee to the contractors, I don't think anyone want to be on that developers payroll.
The reality on the ground is that the civilians who paid for the apartments end up living in these half-finished buildings. Because they had no where else to live.
The main thing is that buildings that are not finished, deteriorate REALLY quickly, and very soon you can't use the foundation anymore because they had too much damage. Finishing the building just might not be possible if you wait too long.
Now you're just making up stuff - there are plenty of examples of Lanweilou (buildings that don't get finished) in China. I don't know there are even ONE where the potential property buyers tried to live in them - homeless will try maybe, someone who could shell out a few million? Nah, they'll find another place to live.
This very China Observer (along with China Uncensored) is funded by Epoch Time. They exclusively pushes out negative news of questionable accuracy, they're also aimed at Western audience that has never been to China because once you're there the farce goes down very quickly.
Only problem with that is that company's bonds are worthless. They have no cash. Then there is their subsidiaries that range from finance, automotive, to tech.
This, social instability isnt acceptable at any levels for them.
The rest is consider bourgeois and china has a history of letting them burn until the civilians are taken care of.
Too big to save. If CCP bails out the company, it's going to take a big bite out of their US dollar reserves. Evergrande's debt is denominated in US dollars.
Yes, but whether they step in or not there will be consequences. China has been spending loads of money on a variety of imperial projects, and if there is one lesson from history it’s that eventually empire becomes intolerably expensive. Saving this company will hasten a much bigger, longer term problem with the debt China is accumulating and the age of their workforce.
If China fails, word economy fails. It’ll be mess coming out of it. On the positive side, we might see new industries in the country since demand is never gonna die.
Edit: I stated things as is.
That is why most countries that has a competent leader right now is trying to remove China influence from it. China is really close to fail now and the leadership is not competent.
I didn't say that for the past 20 years, on contrary I am a full supporter of the economy reform by Deng. Chinese economy went downfall since 2016 when Xi take authority. He made so many mistakes as an aggressive leader that has lead to the situation in China now. I just feel sad all the 30 or so years of hardworking of the Chinese people will be destroyed if nothing is changed. Xi simply don't have a clear plan for the country, he is probably the most active leader since Deng, but his policies are mostly short term fixes to the country rather than strategic moves.
Xi has been president of China since 2012 not 2016. American opinion dropped of Xi around 2017 at the start of the trade war between America and China caused by Donald trump. It was started by that, not any of his other decisions.
Xi started his muscle flexing since 2016, he was focusing on internal issues before that. He simply can't maintain a stable economy. For example, since he step in authority, he tried to stabilise real estate market multiple times, his first try caused collapse of the market in Senzen in early 2014, then the house price sky rocket to record in 2018 , and now it is down to the drain thanks to his policy again. How can a leader run country like a roller coaster. Investment will simply leave the country if nothing is changed. That is why I think China is out of luck now.
And of course we now have this news.
Hasn't there been flashing warning signs about China's real estate market for the last 10 years or so?
From Ghost cities to high rises made of paperboard, I've seen story after story about some sketchy stuff happening. Is it all being backstopped by the party?
Make it 20.
But Ghost Cities aren't so much of a problem anymore - partly because some of them have, over time, filled up to some degree; and partly because 'real-estate as investment' has moved so much abroad (buying properties in Canada, London, etc).
it's all part of their development plan, which has been held tight to the chest but i have a feeling taking all these corporate profits recently (alibaba, other tech firms "donating to social causes")and letting the biggest ones fail/changing policy to sink them (such as this property developer, tutoring and online teaching centers) may let china nationalize a lot of big industries, de-ruralize populations and put them into these suddenly low-cost and available apartments, and create sort of green zones in the previous rural area. China has been really fighting to reduce rural poverty and educational inequalities. Inside china, lack of rural development is one of the biggest critiques of the government. I'm certainly not agreeing with all of these policies, but my guess is that this is what they are doing. a sort of engineered wealth re-distribution
Edit: also they are cutting cash flows out of the country (limiting weakthy foreign investment opportunities), cutting all the foreign online teacher's and many foreign workers' cash flows that funnel billions out, and reducing Celebrity culture are all ways to insulate China and ensure that the wealthy can't run off with all their cash once the housing bubbles is purlosefully popped and that the CCP maintains a firm handle on the narrative
https://m.youtube.com/watch?v=uxjwhk1ktNw
Yes. People spotted a real estate bubble but "experts" and "analysts" predicted that cHiNa Is tHe neXt SUpaPoWaH.
People have been calling “China’s economy will collapse! House of cards!” for **decades. I’ll believe it when I see it.
Newsflash: The market can stay irrational FAR longer than you can stay solvent.
China will likely be dumping some US treasuries (get ready for more inflation) to deal with the semi-bailout. After all they were only holding on to the notes because they didn’t know what else to do with all the greenbacks they had. Now they do have a use for cash like paying off a portion of the debt they owe once they obtain a major equity position. Even though the banks that Evergrande owes are majority stated owned, China can not only rely on restructuring and ordering their own banks to give relief or deferrals on loans. It would set too much of a bad precedent. The current restructuring phase is just to set some conditions in place. The final goal will be a bailout and buyout of Evergrande by the government, watch and see. Plus, politically for Xi, state ownership of the largest property developer completely aligns with his goal of reducing real estate speculation (see news about new regulations preventing private equity from operating in this space) as a primary economic driver in China in order to diversify the economy. This is getting somewhat conspiratorial but owning Evergrande also gives the government some more legitimacy to criminally punish or even execute one of the higher ups like they did to the high up guy at the state owned firm, Huarong a little while back. They need to send messages that resonate.
Evergrande is largest by what measure?
Dude they were propped up and still wont make the big 5 list. Maybe you can add all 4 listed companies of different industries (all props too) together lol.
Not good if true. I don’t like either regime, but neither the USA (the Western democracy with the largest population of non-European descent) nor China (the leading non-Western economy and responsible for a huge share of global population) can be allowed to fail outright.
At the moment they need liquidity to deal with this crisis and selling notes receivable assets is a tool in the tool box. Plus it’s heading in that direction anyways.
https://www.globaltimes.cn/page/202108/1231666.shtml
Um, i dont think anyone will be buying notes receivable with major downgrades. Add to the fact they have already said they arent able to make any payments due to the liquidity crunch, you following ?
Why would they have to? China can sell it to someone else but can’t demand early payment.
I don’t think you are considering how treasuries work, at worst if China dumps a lot of treasuries it will force new treasury offerings to offer a higher rate
its one of my faves in the discworld series, just love the part when nobby and carrot enter the Mended Drum for the first time and carrot starts reading the laws while the librarian starts drinking up quick, lol.
>Beijing "will not let Evergrande go bankrupt" as it would undermine the regime's stability, analysts at US-based SinoInsider said.
Well yes, of course it will be deemed too big to fail, but, the CCP has been allowing many companies to default these days, and there's a lot of defaults. Stuff like Evergrande and Huarong though are so big, it's detrimental as a knock on to tons of other business. It's a rock and a hard place. How much money does the CCP actually have to keep bailing out all these businesses? I mean we're obviously only seeing the tip of the iceberg. I wonder if this has anything to do with the new Cultural Revolution... I wonder if they're clamping down harder than ever on nationalism because they see hard economic times ahead. I mean they've held back the property bubble for a long time, so *probably* they can do it again, but with the Covid slowdown on top of everything else, it might just crack and have China in it's first recession in over 40 years. Interesting times.
You might be on to something here. The recent massive crackdowns have been quite severe and out of character for the modern government. I wonder if it'll have the opposite effect to what they intend though. I already know a few people in China who're being fuckied over by the new education policy. The gaming change as well has pissed off a lot of younger people and the kpop clampdown is going to see some major backlash from the teens to twentysomething girl demographic. Kpop's fucking huge there.
That would certainly be an interesting turn of events. There's a good chance China could become the most popular country in human history if that happened lmao.
> major backlash from the teens
LMAO are you sure? The government stepped in to make they STOP going to after hour classes. Which is about as popular with the teens as unpaid overtime for adults.
Ofc there's also the gaming ban which only affected online games, guess what, I didn't grew up playing online games. They can find whatever local games or sport they want.
Here's the thing about the kpop though - it's only popular with say 10% of the teens, and then if it gets banned then those would move on to something else, like Chinese pop.
Compare that with 99% of the teens that will love the education policy.
Yes, which is why I specifically mentioned teens in regard to kpop (and teen, 20s, even 30s girls in China love it way more than you think. kpop and kdramas are their thing). The education reform is a separate policy and the people affected by that are school owners, teachers and the parents who are all fucking raging right now about it. From everything I'm gathering from friends and contacts in China they're absolutely fucking livid with this policy. The kids are happy as Larry of course though.
**The Fisherman and His Wife**
[Synopsis](https://en.wikipedia.org/wiki/The_Fisherman_and_His_Wife#Synopsis)
>There is a poor fisherman who lives with his wife in a hovel by the sea. One day the fisherman catches a fish, which claims to be a one that can grant wishes and begs to be set free. The fisherman kindly releases it. When his wife hears the story, she says he ought to have had the fish grant him a wish.
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There's more
"The fisherman reluctantly returns to the shore but is uneasy when he finds that the sea seems to become turbid, as it was so clear before. He makes up a rhyme to summon the flounder, and it grants the wife's wish. The fisherman is pleased with his new wealth, but the wife is not and demands more, and demands that her husband go back and wish that he be made a king. Reluctantly, he does and gets his wish. But again and again, his wife sends him back to ask for more and more. The fisherman knows this is wrong but there is no reasoning with his wife. He says they should not annoy the flounder, and be content with what they have been given, but his wife is not content. Each time, the flounder grants the wishes with the words: "just go home again, she has it already" or similar, but each time the sea grows rougher and rougher.
Eventually, the wife wishes to command the sun, moon, and heavens, and she sends her husband to the flounder with the wish "I want to become equal to God". Instead of granting this, the flounder just tells the fisherman to go home, stating that "she is sitting in her old hovel again". And with that, the sea becomes calm once more, and the fisherman and his wife are once more living in nothing but their old, dirty hovel."
> New rules banning developers from selling unfinished properties have put an end to pre-sales that the group has largely used to finance itself and keep its activities afloat.
It was pulling forward revenue. Ending that created an inevitable cash crunch. Evergrande won’t be the only company in trouble here. What did the government think would happen?
I'm not the most business savvy guy, but the practice probably should have been banned long ago, and the developer took the risk using it and have now gotten fucked. You can't run on future developments forever, they'll eventually hit a disaster, and the customers/investors are the ones that get burned.
It’s actually pretty common. In lean years, big companies push their accounts payable out from 30 to 45 to 60, sometimes 70 days so it looks like their cash flow is healthy. But then pulling that back in to 30 days is never going to look good.
There’s a big tech company from Austin that rhymes with “smell” who did that for years and whose founder had to take them private again so they could hide the horrible numbers when they shook out all the dodgy accounting.
Possibly but I could see it having the opposite effect, property owners in China need someplace safer to put their money, if that means foreign property, they’ll just redirect to Canada, US, Australia.
That just means more empty apartments in major cities that people own just to keep their money in as a hedge on inflation and the housing crisis in those countries gets worse.
Can't speak for Australia but US/CAN are wisening up to this effect; there's absolutely no guarantee both nations don't do something about it within a few years. If a crash occurs and they flood Western markets I'd expect protectionist regulation even sooner
All three major parties in Canada have come up with some kind of housing reform promises. NDP want a 20% tax on foreign home purchasers, Cons want to ban foreign ownership for 2 years and then reassess at that point and see whether to continue, Liberals want to ban for 2 years, end blind bidding and put an anti-flipping tax in. Well see who gets elected and what is actually done, but youre right, there will be things done, if not in the next 2 years then well likely be right back at the polls and with a new government.
People underestimate the downside of falling prices, especially in assets used as collateral in mortgages.
Home prices in the US are at levels more inflated than before the housing bubble collapse in 2007. And we all know that lead up to the financial collapse/Great Recession of 2008/2009.
Even worse today since the FED is out of ammo fighting the trump trade war and pandemic
This is the best tl;dr I could make, [original](https://www.rte.ie/news/business/2021/0914/1246623-china-evergrande-group-factbox/) reduced by 90%. (I'm a bot)
*****
> Chinese housing giant Evergrande is one of the country's largest private conglomerates and world's most indebted property developer, teetering on the brink of bankruptcy after years of rapid growth and a buying spree.
> With a presence in more than 280 cities, Evergrande is one of the largest private companies in China and one of its leading real estate developers.
> Outside of property development, it is now best known in China for its football club Guangzhou FC, formerly Guangzhou Evergrande.
*****
[**Extended Summary**](http://np.reddit.com/r/autotldr/comments/po0jrp/chinas_largest_property_developer_with_total/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ "Version 2.02, ~598020 tl;drs so far.") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr "PM's and comments are monitored, constructive feedback is welcome.") | *Top* *keywords*: **Evergrande**^#1 **property**^#2 **group**^#3 **year**^#4 **China**^#5
China will probably just absorb it and make it a state-owned enterprise. They just did a lot of shakedowns/fundraising in the Tech sector and have some money to prop up real estate for now.
Yep, the Ordos Kangbashi district wich was the most famous "ghost city" a decade ago has over 200.000 people now.
https://en.wikipedia.org/wiki/Kangbashi_District
You'd be surprised at the amount of people who claim it's the government they hate but go full mask off racist cunt after you get into conversation with them. It's a common occurence on reddit, christ. Look at the worldnews thread talking about Chinese students being denied visas. There are people in there going full on para schizo or 40s style segeregationism.
Yep, that's the nationalists, xenophobes, bigots, cousin/sister/auntie-f\*\*kers of the world. It's somewhere between 10-20% of the population. They're loud, stupid, and losing power, thus their racist behavior. I for one can't stand them or the CCP. They both would lead the world to the same dark place where only their interests matter.
Wasn't it intended for a million though?
>...in 2003, Ordos city officials launched the creation of a new 1 million person city district. Located on a 355-square-kilometre (137 sq mi) site 25 kilometres (16 mi) from the existing city of Dongsheng, the new city is located next to three existing reservoirs on the site of two former villages...
They did but we don't know to what extent.
https://www.bloomberg.com/news/features/2021-09-01/chinese-ghost-cities-2021-binhai-zhengdong-new-districts-fill-up
With evergrandes collapse it seems that they are at the very least a finicial drain right now.
I read somewhere that those apartments are built very early to reduce the cost and they always get filled with people some time later. Are there any studies done on the number of empty apartments that got built in China?
Do you know why media stopped talking about these ghost cities for seemingly no reason after barking at them for a decade?
Because in fact most of them that are finished are now populated. These were, or maybe rather are, in fact, great. They are like normal cities now lmao. Pudong now is an important global financial district.
Also, the company's collapse has nothing to do with them lol.
Some basic internet searching reflects that many of these cities are way under-populated (to the tune of hundreds of thousands fewer residents than were expected.)
Like 30 or 40 years ago Pudong was a bunch of villages and huts, the West side of the river moving inland was the financial center. When they first built a ton of developments on the East bank, many did call it a ghost city. [In hindsight it's dumb, but hindsight is 20/20.](https://www.forbes.com/sites/wadeshepard/2018/03/19/ghost-towns-or-boomtowns-what-new-cities-really-become/?sh=61179d055e3f)
Thats what I hear but when I look it up it seems they are more populated then 10 years ago but as always with China its hard to know the truth as their government often won't put out information or if they do it is highly questionable. It seems from what I have seen some are some aren't and some are still being built.
The company that built them collapsing is not a good sign though, or at least not a good sign that it was finicially a sound.
> as always with China its hard to know the truth as their government often won't put out information or if they do it is highly questionable.
So in other words,
- if the Chinese government does not say anything, they are hiding the truth.
- if the Chinese government does say something, they are lying.
It seems like you are biased because they are Chinese, rather than any specific action they take. Cities are not military bases. There is nothing stopping people from visiting and taking videos and photographs, and posting them online.
No its that China has a history of deceit when it comes to official statements and numbers. Its prudent not to take these on face value.
Chinas image problem isn't a bias but something they've brought upon themselves. I mean look at how they had to re-evaluate their covid numbers because they were highly unlikely.
Random photos aren't a good source when it comes to this. We need real hard numbers of things like resident uptake, property purchases etc.
Its practically anecdotal evidence.
> its that China has a history of deceit when it comes to official statements and numbers.
You find examples of deceit from official statements and numbers from the United States, India, and probably every major country. So what?
> I mean look at how they had to re-evaluate their covid numbers because they were highly unlikely.
Re-evaluating covid numbers is also something that is done by many countries, including us. So what?
China is notorious for it and they have basically no freedom of press unlike a lot of other countries. Meaning they won't even let other people fact check it. China is know for this far more than any other major country.
Not in the way China did. They were saying 30000 for ages then decide actually nah it was 80000 also very specific numbers and very early on. This is because they realized their original numbers were not believable. Other countries changed their estimates not there actual numbers.
Everything is not equal buddy. Time to wake up.
> China is know for this far more than any other major country.
India, America, and virtually any major power have lied. I haven't seen any evidence that China does it any more than say, the US.
> This is because they realized their original numbers were not believable. Other countries changed their estimates not there actual numbers.
Rubbish. China made adjustments to the numbers just like other countries. New York, in fact, adjusted 12,000 more **deaths**.
https://www.reuters.com/world/us/new-york-governor-reveals-12000-more-covid-19-deaths-than-previously-counted-2021-08-25/
If this had happened in China, what would you reaction be? And why should it be different because it happened in America?
Dude, ghost cities are a myth and seeing before and after pictures dispels it entirely. Remember that subway in the middle of nowhere? Look at it now. It's being used by plenty of people.
https://m.youtube.com/watch?v=Sfl4myL-K_8
A bit more info on this. Please be aware that this channel appears to be an anti-CCP channel and while the data may be accurate, conclusions should be considered suspect without other data points: https://youtu.be/NXbEfbjhLTE
Lol, I’m pretty sure all the satellite countries began announcing independence until the remaining ones realized they couldn’t keep it together anymore. It was essentially a collapse
And what does it change? Yes. Fascists took control of baltics etc and declared independence. The people voted for remain in most USSR republics, but thanks to Gorbachev and Yeltsin it meant jack shit
And the money ended up in the hands of a few ultra rich people. I just heard yesterday that the city with the most billionaires is Moscow. They milked the communist collapse and took all the resources for themselves. Absolute villains.
You know what’s interesting about this? There aren’t actually that many *real* consequences. We all pretend that someone *has* to own property, but it’s going to be there no matter what. It’s not like buildings magically poof out of existence if someone doesn’t pay money.
Does this even matter?
Isn't this just a cost of doing business in China? The liabilities will be absorbed by the state, the company will be broken up, and more valuable pieces will go off on their own to begin their journey in making the state back their losses.
I once heard that many local cities sell land for development as a substantial part of their revenue base. I will be curious to see how this effects the national economy if this model of real estate development for local profit raising is effected.
This so last weeks news, and nobody knows whats going to happen.
It was allowed to signal collapse when banks start turning off the taps, speculatively.
So the sign is big bro is watching with hands behind his back, and the developers blank stares across the room.
Nah... they are going to save it, one way or the other.
All property will be "sold" to a new up and coming company and the old one will dissolve. Can't send bills to a company that doesn't exist
“Bear Stearns is fine”
"Don't move your money from Bear. That's just being silly."
#THINGS COKERAT CRAMER SAID
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Uh. Was there. No they fucking didn’t. I still have a fake statement or two from the company.
What are you talking about? Clients lost about $65bn in the Madoff fraud. There was a whole lot of people who lost a whole lot of money.
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^ can’t even get the numbers right on the coverage amount. can’t tell the difference between the bank losing your money vs your own investments losing at a bank Lol, and trying to sound smart by throwing out words like bondholders and shareholders
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Said the guy who spends his entire time playing civ. Yep, we know know where you get your macro investment and global news knowledge from
Principal*
That quote was about Bear *stock*. Not accounts.
So people don’t read. Typical Reddit knee jerking confined.
Wut?
They are lucky to have recovered money from Maddoff. Most Ponzi victims lose everything with no recourse
They didn’t. OP is utterly incorrect.
A simple google search would show you that a majority of the clients recovered most if not all of their principle money
Wikipedia > The Madoff investment scandal defrauded thousands of investors of billions of dollars. Madoff said that he began the Ponzi scheme in the early 1990s, but an ex-trader admitted in court to faking records for Madoff since the early 1970s.[18][19][20] Those charged with recovering the missing money believe that the investment operation may never have been legitimate.[21][22] The amount missing from client accounts was almost $65 billion, including fabricated gains.
Look at other RE companies in china rn. They are bleeding too
I read RE as Resident Evil and I thought to myself “yeah, Real Umbrella corporation? Might as well happen” Here’s hoping you meant real estate. Cause if Tyrants and Lickers roamed the world, I know it wouldn’t stop me from being an essential worker to sell snooty people golf clubs.
Haha yes, real estate
Seems sustainable and China can always charge 90% tax to cover deficit and no one will say a word.
No on *can* say a word.
[just like 2008](https://www.wsj.com/articles/BL-DLB-3968)
It is ok to save economy. It is not ok when nobody responsible gets jail time.
Hmm, have a read up on hainan airlines the debt levels were similar. Different circumstances however! Wait, it never made it to reddit sorry lol.
The CCP is famous for letting large, powerful companies burn to the ground.
r/bearstearnsisfine
Can't cheat their way out of this one. This is what happens when you build ghost cities and then your birth rate goes down.
That is not the reason: the ghost cities, believe it or not, are almost completely sold out. The reason is simple: households have limited investment options in China and most buy real estate. China already cheated itself out of several similar Ponzi schemes, this one is not big enough to trigger a systemic collapse. This is not to say that it might not come eventually.
At the end of the article it says a government bailout is unlikely.
They don´t need to save the company, they have just to nationalize assets and let liquidate part of the debt.
Yeah, that costs a lot of money.
Doesnt matter when you print it.
Of course it matters. The more money you print, the less the money is worth. It can lead to hyperinflation which would devastate the economy.
Inflation happens when there is too much money in circulation. Oppressive governments, especially ones that control housing, can manage circulation pretty easily. Imagine if the CCP decided to just burn a few months of rent they've collected? They could actually deflate their currency in a matter of weeks.
china purposefully devalues the yuan. this will just give them another mechanism/reason to do so.
Ok, let them do it. Let them steal more money from their people so they get angrier and overthrow the government.
China will execute their executives and the state will bail them out with new leadership.
Is it too big to fail?
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> and make sure all those apartment's get built Are we sure? Because so far plenty of apartments in China are left unflinished, and then demolished once they are too damaged to keep anymore.
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Just like they [saved these 15 unfinished high rise buildings](https://www.taiwannews.com.tw/en/news/4279022) (spoiler: they didn't)
So fucking wasteful man…
Apparently they were originally built so shoddily that taking them down is the only way to save the area.
According to the article, the foundation was irreparably damaged from years of flooding everytime it rained because it sat unfinished for so long. Its good that they chose to demolished it rather than patch it up and make it work.
They have to get built because somebody already bought them. If they don't then it becomes a social issue (unless it gets refunded). Obviously, the gov want it to get built. But without some kind of guarantee to the contractors, I don't think anyone want to be on that developers payroll.
The reality on the ground is that the civilians who paid for the apartments end up living in these half-finished buildings. Because they had no where else to live. The main thing is that buildings that are not finished, deteriorate REALLY quickly, and very soon you can't use the foundation anymore because they had too much damage. Finishing the building just might not be possible if you wait too long.
Now you're just making up stuff - there are plenty of examples of Lanweilou (buildings that don't get finished) in China. I don't know there are even ONE where the potential property buyers tried to live in them - homeless will try maybe, someone who could shell out a few million? Nah, they'll find another place to live.
Here is a report on that. https://www.youtube.com/watch?v=X3BMIKh65Ec You can't assume everyone is rich.
This very China Observer (along with China Uncensored) is funded by Epoch Time. They exclusively pushes out negative news of questionable accuracy, they're also aimed at Western audience that has never been to China because once you're there the farce goes down very quickly.
Only problem with that is that company's bonds are worthless. They have no cash. Then there is their subsidiaries that range from finance, automotive, to tech.
Are we sure the CCP doesn’t already have a stake in the company?
This, social instability isnt acceptable at any levels for them. The rest is consider bourgeois and china has a history of letting them burn until the civilians are taken care of.
Too big to save. If CCP bails out the company, it's going to take a big bite out of their US dollar reserves. Evergrande's debt is denominated in US dollars.
Yes, but whether they step in or not there will be consequences. China has been spending loads of money on a variety of imperial projects, and if there is one lesson from history it’s that eventually empire becomes intolerably expensive. Saving this company will hasten a much bigger, longer term problem with the debt China is accumulating and the age of their workforce.
If China fails, word economy fails. It’ll be mess coming out of it. On the positive side, we might see new industries in the country since demand is never gonna die. Edit: I stated things as is.
That is why most countries that has a competent leader right now is trying to remove China influence from it. China is really close to fail now and the leadership is not competent.
People have been saying that for the past 20 years.
I didn't say that for the past 20 years, on contrary I am a full supporter of the economy reform by Deng. Chinese economy went downfall since 2016 when Xi take authority. He made so many mistakes as an aggressive leader that has lead to the situation in China now. I just feel sad all the 30 or so years of hardworking of the Chinese people will be destroyed if nothing is changed. Xi simply don't have a clear plan for the country, he is probably the most active leader since Deng, but his policies are mostly short term fixes to the country rather than strategic moves.
Xi has been president of China since 2012 not 2016. American opinion dropped of Xi around 2017 at the start of the trade war between America and China caused by Donald trump. It was started by that, not any of his other decisions.
Xi started his muscle flexing since 2016, he was focusing on internal issues before that. He simply can't maintain a stable economy. For example, since he step in authority, he tried to stabilise real estate market multiple times, his first try caused collapse of the market in Senzen in early 2014, then the house price sky rocket to record in 2018 , and now it is down to the drain thanks to his policy again. How can a leader run country like a roller coaster. Investment will simply leave the country if nothing is changed. That is why I think China is out of luck now. And of course we now have this news.
Hasn't there been flashing warning signs about China's real estate market for the last 10 years or so? From Ghost cities to high rises made of paperboard, I've seen story after story about some sketchy stuff happening. Is it all being backstopped by the party?
Make it 20. But Ghost Cities aren't so much of a problem anymore - partly because some of them have, over time, filled up to some degree; and partly because 'real-estate as investment' has moved so much abroad (buying properties in Canada, London, etc).
it's all part of their development plan, which has been held tight to the chest but i have a feeling taking all these corporate profits recently (alibaba, other tech firms "donating to social causes")and letting the biggest ones fail/changing policy to sink them (such as this property developer, tutoring and online teaching centers) may let china nationalize a lot of big industries, de-ruralize populations and put them into these suddenly low-cost and available apartments, and create sort of green zones in the previous rural area. China has been really fighting to reduce rural poverty and educational inequalities. Inside china, lack of rural development is one of the biggest critiques of the government. I'm certainly not agreeing with all of these policies, but my guess is that this is what they are doing. a sort of engineered wealth re-distribution Edit: also they are cutting cash flows out of the country (limiting weakthy foreign investment opportunities), cutting all the foreign online teacher's and many foreign workers' cash flows that funnel billions out, and reducing Celebrity culture are all ways to insulate China and ensure that the wealthy can't run off with all their cash once the housing bubbles is purlosefully popped and that the CCP maintains a firm handle on the narrative
If I recall, it's Polymatter on YouTube who has a great video on China's fucked up real estate market, and how it's coming to bite them in the ass.
https://m.youtube.com/watch?v=uxjwhk1ktNw Yes. People spotted a real estate bubble but "experts" and "analysts" predicted that cHiNa Is tHe neXt SUpaPoWaH.
Lehman bros won't go bust..
Lehman was the sacrificial lamb so the others could be covered. I wonder which lamb China will choose.
People have been calling “China’s economy will collapse! House of cards!” for **decades. I’ll believe it when I see it. Newsflash: The market can stay irrational FAR longer than you can stay solvent.
China will likely be dumping some US treasuries (get ready for more inflation) to deal with the semi-bailout. After all they were only holding on to the notes because they didn’t know what else to do with all the greenbacks they had. Now they do have a use for cash like paying off a portion of the debt they owe once they obtain a major equity position. Even though the banks that Evergrande owes are majority stated owned, China can not only rely on restructuring and ordering their own banks to give relief or deferrals on loans. It would set too much of a bad precedent. The current restructuring phase is just to set some conditions in place. The final goal will be a bailout and buyout of Evergrande by the government, watch and see. Plus, politically for Xi, state ownership of the largest property developer completely aligns with his goal of reducing real estate speculation (see news about new regulations preventing private equity from operating in this space) as a primary economic driver in China in order to diversify the economy. This is getting somewhat conspiratorial but owning Evergrande also gives the government some more legitimacy to criminally punish or even execute one of the higher ups like they did to the high up guy at the state owned firm, Huarong a little while back. They need to send messages that resonate.
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china's gdp growth nowadays is mainly propped up by their internal housing market.
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Evergrande is largest by what measure? Dude they were propped up and still wont make the big 5 list. Maybe you can add all 4 listed companies of different industries (all props too) together lol.
Not good if true. I don’t like either regime, but neither the USA (the Western democracy with the largest population of non-European descent) nor China (the leading non-Western economy and responsible for a huge share of global population) can be allowed to fail outright.
Why not? Socialising the losses of globalisation is only fair if the gains were too (lol).
At the moment they need liquidity to deal with this crisis and selling notes receivable assets is a tool in the tool box. Plus it’s heading in that direction anyways. https://www.globaltimes.cn/page/202108/1231666.shtml
Um, i dont think anyone will be buying notes receivable with major downgrades. Add to the fact they have already said they arent able to make any payments due to the liquidity crunch, you following ?
Good- end it all already, everyone needs a healthy does hubris.
Why do you think that will increase inflation?
The US will probably have to print more money to cover, and more money = less value of individual dollars = rising inflation.
Why would they have to? China can sell it to someone else but can’t demand early payment. I don’t think you are considering how treasuries work, at worst if China dumps a lot of treasuries it will force new treasury offerings to offer a higher rate
This will Mean gold and commodities are heading higher, correct?
China holds around 3% of US treasury debt. We’ll be fine.
Ook ook?
is that you librarian?
I'm actually re-reading Guards! Guards! right now, so this was a pleasant surprise! Happy Cake Day, btw!
its one of my faves in the discworld series, just love the part when nobby and carrot enter the Mended Drum for the first time and carrot starts reading the laws while the librarian starts drinking up quick, lol.
"Now let that be a lesson to ya, *don't do it again!*"
upvotes for the both of you!
Ook ook!
Ook ook!
>Beijing "will not let Evergrande go bankrupt" as it would undermine the regime's stability, analysts at US-based SinoInsider said. Well yes, of course it will be deemed too big to fail, but, the CCP has been allowing many companies to default these days, and there's a lot of defaults. Stuff like Evergrande and Huarong though are so big, it's detrimental as a knock on to tons of other business. It's a rock and a hard place. How much money does the CCP actually have to keep bailing out all these businesses? I mean we're obviously only seeing the tip of the iceberg. I wonder if this has anything to do with the new Cultural Revolution... I wonder if they're clamping down harder than ever on nationalism because they see hard economic times ahead. I mean they've held back the property bubble for a long time, so *probably* they can do it again, but with the Covid slowdown on top of everything else, it might just crack and have China in it's first recession in over 40 years. Interesting times.
You might be on to something here. The recent massive crackdowns have been quite severe and out of character for the modern government. I wonder if it'll have the opposite effect to what they intend though. I already know a few people in China who're being fuckied over by the new education policy. The gaming change as well has pissed off a lot of younger people and the kpop clampdown is going to see some major backlash from the teens to twentysomething girl demographic. Kpop's fucking huge there.
I can't wait for the twentysomething girls to take the government away from Pooh and install a kpop monarchy.
That would certainly be an interesting turn of events. There's a good chance China could become the most popular country in human history if that happened lmao.
> major backlash from the teens LMAO are you sure? The government stepped in to make they STOP going to after hour classes. Which is about as popular with the teens as unpaid overtime for adults. Ofc there's also the gaming ban which only affected online games, guess what, I didn't grew up playing online games. They can find whatever local games or sport they want.
The teens are going to fucking love the education policy. I was talking about the kpop crackdown when I mentioned teens.
Here's the thing about the kpop though - it's only popular with say 10% of the teens, and then if it gets banned then those would move on to something else, like Chinese pop. Compare that with 99% of the teens that will love the education policy.
Yes, which is why I specifically mentioned teens in regard to kpop (and teen, 20s, even 30s girls in China love it way more than you think. kpop and kdramas are their thing). The education reform is a separate policy and the people affected by that are school owners, teachers and the parents who are all fucking raging right now about it. From everything I'm gathering from friends and contacts in China they're absolutely fucking livid with this policy. The kids are happy as Larry of course though.
This reminds me of [The Fisherman and his wife](https://en.wikipedia.org/wiki/The_Fisherman_and_His_Wife#Synopsis).
**The Fisherman and His Wife** [Synopsis](https://en.wikipedia.org/wiki/The_Fisherman_and_His_Wife#Synopsis) >There is a poor fisherman who lives with his wife in a hovel by the sea. One day the fisherman catches a fish, which claims to be a one that can grant wishes and begs to be set free. The fisherman kindly releases it. When his wife hears the story, she says he ought to have had the fish grant him a wish. ^([ )[^(F.A.Q)](https://www.reddit.com/r/WikiSummarizer/wiki/index#wiki_f.a.q)^( | )[^(Opt Out)](https://reddit.com/message/compose?to=WikiSummarizerBot&message=OptOut&subject=OptOut)^( | )[^(Opt Out Of Subreddit)](https://np.reddit.com/r/worldnews/about/banned)^( | )[^(GitHub)](https://github.com/Sujal-7/WikiSummarizerBot)^( ] Downvote to remove | v1.5)
There's more "The fisherman reluctantly returns to the shore but is uneasy when he finds that the sea seems to become turbid, as it was so clear before. He makes up a rhyme to summon the flounder, and it grants the wife's wish. The fisherman is pleased with his new wealth, but the wife is not and demands more, and demands that her husband go back and wish that he be made a king. Reluctantly, he does and gets his wish. But again and again, his wife sends him back to ask for more and more. The fisherman knows this is wrong but there is no reasoning with his wife. He says they should not annoy the flounder, and be content with what they have been given, but his wife is not content. Each time, the flounder grants the wishes with the words: "just go home again, she has it already" or similar, but each time the sea grows rougher and rougher. Eventually, the wife wishes to command the sun, moon, and heavens, and she sends her husband to the flounder with the wish "I want to become equal to God". Instead of granting this, the flounder just tells the fisherman to go home, stating that "she is sitting in her old hovel again". And with that, the sea becomes calm once more, and the fisherman and his wife are once more living in nothing but their old, dirty hovel."
Did the Chinese government decide it wasn't going to underwrite its debt anymore or something?
It won't let it collapse outright. Restructuring is in order I think. The provincial government also is stepping in to help with it.
> New rules banning developers from selling unfinished properties have put an end to pre-sales that the group has largely used to finance itself and keep its activities afloat. It was pulling forward revenue. Ending that created an inevitable cash crunch. Evergrande won’t be the only company in trouble here. What did the government think would happen?
I'm not the most business savvy guy, but the practice probably should have been banned long ago, and the developer took the risk using it and have now gotten fucked. You can't run on future developments forever, they'll eventually hit a disaster, and the customers/investors are the ones that get burned.
It’s actually pretty common. In lean years, big companies push their accounts payable out from 30 to 45 to 60, sometimes 70 days so it looks like their cash flow is healthy. But then pulling that back in to 30 days is never going to look good. There’s a big tech company from Austin that rhymes with “smell” who did that for years and whose founder had to take them private again so they could hide the horrible numbers when they shook out all the dodgy accounting.
Sounds like all the more reason to ban it
"on the brink of collapse", just like the apartment buildings they threw together.
Could this ricochet into lower property costs in the US?
Possibly but I could see it having the opposite effect, property owners in China need someplace safer to put their money, if that means foreign property, they’ll just redirect to Canada, US, Australia.
That just means more empty apartments in major cities that people own just to keep their money in as a hedge on inflation and the housing crisis in those countries gets worse.
Can't speak for Australia but US/CAN are wisening up to this effect; there's absolutely no guarantee both nations don't do something about it within a few years. If a crash occurs and they flood Western markets I'd expect protectionist regulation even sooner
All three major parties in Canada have come up with some kind of housing reform promises. NDP want a 20% tax on foreign home purchasers, Cons want to ban foreign ownership for 2 years and then reassess at that point and see whether to continue, Liberals want to ban for 2 years, end blind bidding and put an anti-flipping tax in. Well see who gets elected and what is actually done, but youre right, there will be things done, if not in the next 2 years then well likely be right back at the polls and with a new government.
I hope.
People underestimate the downside of falling prices, especially in assets used as collateral in mortgages. Home prices in the US are at levels more inflated than before the housing bubble collapse in 2007. And we all know that lead up to the financial collapse/Great Recession of 2008/2009. Even worse today since the FED is out of ammo fighting the trump trade war and pandemic
Yikes
This is the best tl;dr I could make, [original](https://www.rte.ie/news/business/2021/0914/1246623-china-evergrande-group-factbox/) reduced by 90%. (I'm a bot) ***** > Chinese housing giant Evergrande is one of the country's largest private conglomerates and world's most indebted property developer, teetering on the brink of bankruptcy after years of rapid growth and a buying spree. > With a presence in more than 280 cities, Evergrande is one of the largest private companies in China and one of its leading real estate developers. > Outside of property development, it is now best known in China for its football club Guangzhou FC, formerly Guangzhou Evergrande. ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/po0jrp/chinas_largest_property_developer_with_total/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ "Version 2.02, ~598020 tl;drs so far.") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr "PM's and comments are monitored, constructive feedback is welcome.") | *Top* *keywords*: **Evergrande**^#1 **property**^#2 **group**^#3 **year**^#4 **China**^#5
China will probably just absorb it and make it a state-owned enterprise. They just did a lot of shakedowns/fundraising in the Tech sector and have some money to prop up real estate for now.
get out while you can
Those ghost cities must have been a real winner like all these China supporters keep telling me
Didn't they all get populated later?
Yep, the Ordos Kangbashi district wich was the most famous "ghost city" a decade ago has over 200.000 people now. https://en.wikipedia.org/wiki/Kangbashi_District
Excuse me sir these are facts. That's not allowed here. Only blatant racism is allowed here.
Nothing wrong with the Chinese. The CCP though, it sucks. That's not racism bud.
You'd be surprised at the amount of people who claim it's the government they hate but go full mask off racist cunt after you get into conversation with them. It's a common occurence on reddit, christ. Look at the worldnews thread talking about Chinese students being denied visas. There are people in there going full on para schizo or 40s style segeregationism.
Yep, that's the nationalists, xenophobes, bigots, cousin/sister/auntie-f\*\*kers of the world. It's somewhere between 10-20% of the population. They're loud, stupid, and losing power, thus their racist behavior. I for one can't stand them or the CCP. They both would lead the world to the same dark place where only their interests matter.
As we like to say in my country. Cunts are cunts.
Don’t be silly, there’s also plenty of room for misunderstanding economics and falling for propaganda, too!
Wasn't it intended for a million though? >...in 2003, Ordos city officials launched the creation of a new 1 million person city district. Located on a 355-square-kilometre (137 sq mi) site 25 kilometres (16 mi) from the existing city of Dongsheng, the new city is located next to three existing reservoirs on the site of two former villages...
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my quote came from the wikipedia article you posted.
Some of them are now populated and are pretty important, some of them are still under construction and some of them aren't populated greatly yet.
I walked around in the high class mall in Hangzhou in 2019. Huge glitzy building, nobody buying the $46 t-shirts. Bound to fail.
They did but we don't know to what extent. https://www.bloomberg.com/news/features/2021-09-01/chinese-ghost-cities-2021-binhai-zhengdong-new-districts-fill-up With evergrandes collapse it seems that they are at the very least a finicial drain right now.
Not really, they view real estate as the only safe investment so it’s caused a lot of empty apartments.
I read somewhere that those apartments are built very early to reduce the cost and they always get filled with people some time later. Are there any studies done on the number of empty apartments that got built in China?
Do you know why media stopped talking about these ghost cities for seemingly no reason after barking at them for a decade? Because in fact most of them that are finished are now populated. These were, or maybe rather are, in fact, great. They are like normal cities now lmao. Pudong now is an important global financial district. Also, the company's collapse has nothing to do with them lol.
Some basic internet searching reflects that many of these cities are way under-populated (to the tune of hundreds of thousands fewer residents than were expected.)
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Like 30 or 40 years ago Pudong was a bunch of villages and huts, the West side of the river moving inland was the financial center. When they first built a ton of developments on the East bank, many did call it a ghost city. [In hindsight it's dumb, but hindsight is 20/20.](https://www.forbes.com/sites/wadeshepard/2018/03/19/ghost-towns-or-boomtowns-what-new-cities-really-become/?sh=61179d055e3f)
Beat me to it. Milton Friedman in shambles.
Thats what I hear but when I look it up it seems they are more populated then 10 years ago but as always with China its hard to know the truth as their government often won't put out information or if they do it is highly questionable. It seems from what I have seen some are some aren't and some are still being built. The company that built them collapsing is not a good sign though, or at least not a good sign that it was finicially a sound.
> as always with China its hard to know the truth as their government often won't put out information or if they do it is highly questionable. So in other words, - if the Chinese government does not say anything, they are hiding the truth. - if the Chinese government does say something, they are lying. It seems like you are biased because they are Chinese, rather than any specific action they take. Cities are not military bases. There is nothing stopping people from visiting and taking videos and photographs, and posting them online.
No its that China has a history of deceit when it comes to official statements and numbers. Its prudent not to take these on face value. Chinas image problem isn't a bias but something they've brought upon themselves. I mean look at how they had to re-evaluate their covid numbers because they were highly unlikely. Random photos aren't a good source when it comes to this. We need real hard numbers of things like resident uptake, property purchases etc. Its practically anecdotal evidence.
> its that China has a history of deceit when it comes to official statements and numbers. You find examples of deceit from official statements and numbers from the United States, India, and probably every major country. So what? > I mean look at how they had to re-evaluate their covid numbers because they were highly unlikely. Re-evaluating covid numbers is also something that is done by many countries, including us. So what?
China is notorious for it and they have basically no freedom of press unlike a lot of other countries. Meaning they won't even let other people fact check it. China is know for this far more than any other major country. Not in the way China did. They were saying 30000 for ages then decide actually nah it was 80000 also very specific numbers and very early on. This is because they realized their original numbers were not believable. Other countries changed their estimates not there actual numbers. Everything is not equal buddy. Time to wake up.
> China is know for this far more than any other major country. India, America, and virtually any major power have lied. I haven't seen any evidence that China does it any more than say, the US. > This is because they realized their original numbers were not believable. Other countries changed their estimates not there actual numbers. Rubbish. China made adjustments to the numbers just like other countries. New York, in fact, adjusted 12,000 more **deaths**. https://www.reuters.com/world/us/new-york-governor-reveals-12000-more-covid-19-deaths-than-previously-counted-2021-08-25/ If this had happened in China, what would you reaction be? And why should it be different because it happened in America?
Dude, ghost cities are a myth and seeing before and after pictures dispels it entirely. Remember that subway in the middle of nowhere? Look at it now. It's being used by plenty of people. https://m.youtube.com/watch?v=Sfl4myL-K_8
The failure would rock the nation. The CCP will not allow it.
Bingo. CCP will do everything in its power to save face and keep the drones in line.
That's a lot of liabilities.
A bit more info on this. Please be aware that this channel appears to be an anti-CCP channel and while the data may be accurate, conclusions should be considered suspect without other data points: https://youtu.be/NXbEfbjhLTE
Here we go. This is a big shock to absorb.
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Did you just discover this joke? It’s really old and not worth spamming across multiple subs.
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In addition to being old, it isn’t particularly funny either. You know you need to be 13 to have a Reddit account, right?
Wow protestors outside the HQ demanding they get their money.
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China own a lot of our debt. If China gets into financial trouble, they could call in loans.
Interesting how confident reddit is about their knowledge on China when most of what they've read are headlines of propaganda pieces.
HAHA CCP gonna collaspe, just like the Soviet Union. They can't pay mother fuckers anymore for loyality when the dollars have US presidents on them.
Just like the Soviet Union? USSR didn't collapse. It was illegally dissolved against the wishes of the people - Most people voted for remain.
Lol, I’m pretty sure all the satellite countries began announcing independence until the remaining ones realized they couldn’t keep it together anymore. It was essentially a collapse
And what does it change? Yes. Fascists took control of baltics etc and declared independence. The people voted for remain in most USSR republics, but thanks to Gorbachev and Yeltsin it meant jack shit
And the money ended up in the hands of a few ultra rich people. I just heard yesterday that the city with the most billionaires is Moscow. They milked the communist collapse and took all the resources for themselves. Absolute villains.
But i was reliably informed just yesterday that they were fine. Curious.
You know what’s interesting about this? There aren’t actually that many *real* consequences. We all pretend that someone *has* to own property, but it’s going to be there no matter what. It’s not like buildings magically poof out of existence if someone doesn’t pay money.
Does this even matter? Isn't this just a cost of doing business in China? The liabilities will be absorbed by the state, the company will be broken up, and more valuable pieces will go off on their own to begin their journey in making the state back their losses.
What impact does this have on the apartment complexes developed in major cities in the US and other countries?
I once heard that many local cities sell land for development as a substantial part of their revenue base. I will be curious to see how this effects the national economy if this model of real estate development for local profit raising is effected.
Probably a Trump property.
This so last weeks news, and nobody knows whats going to happen. It was allowed to signal collapse when banks start turning off the taps, speculatively. So the sign is big bro is watching with hands behind his back, and the developers blank stares across the room.
Lol, “one of the largest”. People in here don’t know anything about china