atans1

Why Xi is screwing Evergrande

In China, Property on 09/10/2021 at 1:37 pm

He is trying to reduce leverage in the Chinese real estate industry by forcing the developers to reduce leverage. The coming takeover by state related entities and tycoons doing NS (Think the Mas of Tencent and Alibaba) of Evergrande (the largest and most indebted property developer) will be a major test for the government and CCP.

He’s taking a risk because if the takeover of the company is mishandled, it will burst China’s almighty housing bubble, hitting growth in the process.

He is trying to curb speculation in housing to ensure every Chinese family can own their own home. First time purchasers have declined very rapidly while the speculators are multiplying like rabbits.

He should learn from S’pore: public housing.

  1. […] Why Xi is screwing Evergrande(Thoughts of a cynical investor) […]

  2. It’s also about demographics.

    With already 96% urban home ownership & 90% overall home ownership, plus an imbalanced gender gap & structural slowdown of new family formation, continuing drop in 1st time home buyers is not surprising.

    China marriages down 40% over last 7 years

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