Chinese property developer sales collapsed in September due to the crisis in Evergrande. That troubled Chinese real estate group has failed to pay its debts and can no longer pay suppliers. Evergrande is heavily indebted. There are fears of a spillover effect from bankruptcy if the company goes bankrupt.
Major Chinese developers saw their revenue drop 36 percent year-over-year last month. The downward trend actually started in July.
US Secretary of State Anthony Blinken urged China to deal “responsibly” with the crisis in the Evergrande. According to him, it could also have far-reaching consequences for the rest of the world. This increases pressure on the Chinese government to find a solution.
Earlier this week, it was announced that other companies in the Chinese real estate sector are also experiencing debt problems. Property developers Fantasia Holdings and Sinic have missed debt repayment deadlines.
At Evergrande, a capital increase deal is likely to be worked on. Industry partner Hopson Development wants to acquire 51% of the company’s real estate subsidiary for 4.3 billion euros, according to Chinese media.
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