Evergrande I Kina kan gå i konkurs (300 miljarder dollar)

His [Xi] first speech in China after becoming president was critical of the Soviet Union for being soft on perestroika. They should have crushed it when they had the chance, he said. Xi then set up an institute to study the Soviet Union’s collapse. That was a red flag to us that he was going to be more hardline than people thought. He went on to do an anti-corruption drive, which people dismissed as a typical settling of scores that Chinese leaders do. But it actually extended beyond that. A couple of years later, he began talking in Puritanical terms about social issues. Again, that was different. Nobody had cared about that stuff for 20 years. Do what you want as long as you don’t question the party. Next, we had the book collecting his speeches and writings, which people could be seen carrying around. He started showing up in military events dressed in Mao jackets. This symbolism isn’t lost in China.

We noticed all this, but the real switch occurred in 2019 when he started going after celebrities like Jack Ma [co-founder of Alibaba]. At that point, it was clear that this president was not stepping down at the end of 10 years. He was taking a much harder line on the “flowers of capitalism,” if you will, than past presidents. In 2021, all of this exploded into the open. There’s been initiative after initiative. Redistributing wealth to the masses. Going after other leaders. Overlaid on top of this is the Evergrande saga.

Since we started following China at the end of ’09, this is the fourth time that they’ve attempted to slow the real estate market down, because they do know that this is going to be basically too big to deal with if it keeps growing at the rate it’s growing. But every time they’ve done it, the economy has hit stall speed very quickly, and they panicked. They went from hitting the breaks to hitting the accelerator. That’s why we’ve seen higher levels of real estate. The idea that “I can’t lose buying apartments” became ingrained with bankers, real estate speculators, and the public.

The Chinese real estate finance system is exactly the opposite of ours. In our system, when there’s a new development, you’re typically required to put 10% down to sign a contract, with the balance due on closing. You go get your financing and your mortgage proceeds pay for the rest of the house or the apartment. In China, you pay upfront. You are extending the developer a loan. So, of the $300 billion in liabilities Evergrande owes, I think the biggest chunk, last time I checked, is basically what we would call a deferred revenue item. It’s money that you took in from people, and you owe them an apartment. And the apartments aren’t done, but the money’s been spent. So the problem is not just bailing people out, but the question of who is going to put up more capital to pay off the retail people that have bought apartments that haven’t gotten anything.

I think the Chinese government has convinced themselves that by borrowing lots of money from their own citizens and elsewhere, that there’s ongoing activity that is sustainable. But as we find out in every real estate bubble that bursts, when your activity is constructing real estate itself and you’re taking capital and turning it into income by paying construction workers and real estate brokers and everybody else, when that activity ends, it goes poof! And there’s no income from the asset you’ve just financed. It’s not like building a factory where you have demand for your products. It’s just apartments sitting empty in Beijing or Shenzhen.

It’s the rise of bellicosity, the rise of a more militant China as the economy and the financial situation has gotten more precarious. That’s a 1930s kind of problem. We know that a rise in authoritarianism and statism around the world was one of the upshots of ’29-’32. You had leaders saying, “I’m the one that can get us out of this problem” and “They are the ones who got us here.” This situation in China is a little bit frightening to the student of history, because there’s no doubt, whether you’re flying over Taiwan airspace or coming close to ships in the South China Sea, that there’s a rise of tensions in and around China. I don’t think it’s a coincidence.

They’ve got to make some tough decisions on how the economic model is going to work going forward. In the late ‘80s, everybody thought Japan was going to surpass the U.S., but they had the same problems – a banking system that was bloated, real estate prices too high, too dependent on exports, and they’ve had 30 years of muddling through. The idea that China is going to be growing 6 or 7% while the rest of the world is growing 2% just has to be revisited. It’s not gonna happen. That realization is going to be the bucket of cold water that’s going to force them to rethink next steps. The population has been used to this leveraged prosperity, and everybody has borrowed money to buy real estate. What are the next steps? It’s otherworldly what they have done with real estate. Whatever happens, it’s going to be severe somehow. Whether it’s politically or financially — whatever it is, it’ll be severe.

Evergrande Group's chief executive is holding talks in Hong Kong with investment banks and creditors over a possible restructuring and asset sales, two people said, as the Chinese developer battles against default on more than US$300 billion (S$404 billion) in debts.

CEO Xia Haijun, a confidant of chairman Hui Ka Yan and who runs Evergrande's day-to-day operations including financing, has been in Hong Kong, where the property firm has a major presence, for more than two months, sources told Reuters.

In 2002, when Xu Jiayin wanted to take his property business public for the first time, he teamed up with a company linked to the brother of Wen Jiabao, who was about to take over as China’s premier. Years later, after his company, Evergrande, had grown into China’s second largest property developer, three Hong Kong billionaires who Xu played poker with gave him cash infusions to help settle some debts. When Xu took a wild leap into electric vehicles, he pitched the project to Jack Ma at a dinner party — and ended up securing an investment from Ma’s fund. And then last year, in a bid to save his increasingly indebted company, Xu convinced the CEO of a Chinese retail conglomerate not to collect the $3 billion that Evergrande owed him.

The sixth plenary session of the 19th Communist Party of China (CPC) Central Committee will be held in Beijing from November 8 to 11, during which a key resolution on the major achievements and historical experience of the Party's 100 years of endeavors will be reviewed. This was decided at a meeting of the CPC Central Committee Political Bureau on Monday. Xi Jinping, general secretary of the CPC Central Committee, presided over the meeting.

A review of the major achievements and the historical experience accumulated during the Party's 100 years of endeavor is needed for the new course of fully building a modern socialist country and for upholding and promoting socialism with Chinese characteristics in the new era, the meeting said. It is also needed for upholding General Secretary Xi Jinping's core position at the CPC Central Committee and in the whole Party, as well as the authority of the CPC Central Committee and its centralized, unified leadership, the meeting stressed.

At the request of the Company, trading in the shares of the Company on the Stock Exchange was halted with effect from 9:00 a.m. on 4 October 2021. Application has been made by the Company for the resumption of trading in the shares of the Company on the Stock Exchange with effect from 9:00 a.m. on 21 October 2021. Shareholders of the Company and other investors are reminded to consider the related risks and exercise caution when dealing in the securities of the Company.
By order of the board
China Evergrande Group
Hui Ka Yan
Chairman