{"id":173483,"date":"2025-08-25T04:55:14","date_gmt":"2025-08-25T04:55:14","guid":{"rendered":"https:\/\/www.europesays.com\/us\/173483\/"},"modified":"2025-08-25T04:55:14","modified_gmt":"2025-08-25T04:55:14","slug":"why-should-i-care-about-the-crisis-hit-chinese-property-giant","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/173483\/","title":{"rendered":"Why should I care about the crisis-hit Chinese property giant?"},"content":{"rendered":"

Peter Hoskins<\/p>\n

Business reporter, BBC News<\/p>\n

\"GettyGetty Images<\/p>\n

Before its debt crisis, Evergrande was building a new stadium for its football team, Guangzhou FC<\/p>\n

What does Evergrande do?<\/p>\n

Evergrande, formerly known as the Hengda Group, was founded by Mr Hui in 1996 in Guangzhou, southern China.<\/p>\n

At the time of its collapse, Evergrande had some 1,300 projects under development in 280 cities across China.<\/p>\n

The Evergrande Group as a whole encompassed far more than just real estate development.<\/p>\n

Its businesses ranged from wealth management to making electric cars. It even owned a controlling stake in the country’s most successful football team, Guangzhou FC.<\/p>\n

Mr Hui was once Asia’s richest person with his fortune estimated at $42.5bn (\u00a331.6bn) by Forbes, but his wealth plummeted as Evergrande’s problems deepened.<\/p>\n

Why is Evergrande in trouble?<\/p>\n

Evergrande expanded aggressively to become one of China’s biggest companies by borrowing more than $300bn.<\/p>\n

But in 2020, the Chinese government brought in new rules to control the amount owed by big real estate developers.<\/p>\n

The new measures led Evergrande to offer its properties at major discounts to ensure money was coming in to keep the business afloat.<\/p>\n

That meant the company struggled to meet the interest payments on its debts.<\/p>\n

Since the start of the crisis Evergrande’s shares have lost more than 99% of their value.<\/p>\n

In August 2023, the firm filed for bankruptcy in New York<\/a>, in a bid to protect its US assets as it worked on a multi-billion dollar deal with creditors.<\/p>\n

Why do Evergrande’s problems matter?<\/p>\n

Evergrande’s problems and the property crisis as a whole have hurt the Chinese economy as the real estate industry accounted for about a third of the country’s gross domestic product (GDP), an annual measure of all economic activity.<\/p>\n

It was not only a significant driver of growth but also a major source of revenue for local governments.<\/p>\n

\"GettyGetty Images<\/p>\n

Xi Jinping has pivoted China’s economy towards high-tech manufacturing, ramping up competition with the US<\/p>\n

A sharp fall in investment and fund raising activities in real estate have impacted the financial sector, and allied industries like construction, which are a huge source of employment. <\/p>\n

At the grassroots level, it has hit ordinary people in China hard as many families put their savings into property.<\/p>\n

All of this has helped put pressure on consumer spending, which Beijing sees as crucial to boosting economic growth.<\/p>\n

Why didn’t Evergrande get a state bailout?<\/p>\n

Through the property crisis the Chinese government has taken a number of measures to help shore up the industry and the economy.<\/p>\n

Beijing has poured hundreds of billions of dollars into measures including the country\u2019s central bank providing low-interest loans for state-controlled banks to support struggling real estate projects.<\/p>\n

There has also been help for home buyers and incentives to purchase new household appliances.<\/p>\n

But it did not roll direct bailouts for the country’s struggling developers, partly to avoid encouraging more risky behaviour.<\/p>\n

While the property market was once crucial to China’s economic growth, President Xi Jinping\u2019s focus has changed to competing with US to gain the lead in high-tech manufacturing and AI. <\/p>\n

So the ruling Communist Party\u2018s economic priorities have shifted to areas like renewable energy, electric vehicles, automation and robotics. <\/p>\n","protected":false},"excerpt":{"rendered":"Peter Hoskins Business reporter, BBC News Getty Images Before its debt crisis, Evergrande was building a new stadium…\n","protected":false},"author":3,"featured_media":173484,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[64,67,132,68],"class_list":{"0":"post-173483","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-business","9":"tag-united-states","10":"tag-unitedstates","11":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/115087627087466457","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/173483","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=173483"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/173483\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/173484"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=173483"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=173483"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=173483"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}