Blog Home

Is Communist China's Old Form Of Crony Capitalism About To Crash The Reality Of New "Woke" Capitalist Behind The Belt & Road Initiative?

Is Communist China's Old Form Of Crony Capitalism About To Crash The Reality Of New "Woke" Capitalist Behind The Belt & Road Initiative?
...

China’s Nightmare Evergrande Scenario Is an Uncontrolled Crash

(Bloomberg) -- Protests intensify at China Evergrande Group offices across the country as the developer falls further behind on promises to more than 70,000 investors. Construction of unfinished properties with enough floor space to cover three-fourths of Manhattan grinds to a halt, leaving more than a million homebuyers in limbo.

Fire sales pummel an already shaky real estate market, squeezing other developers and rippling through a supply chain that accounts for more than a quarter of Chinese economic output. Covid-weary consumers retrench even further, and the risk of popular discontent rises during a politically sensitive transition period for President Xi Jinping. Credit-market stress spreads from lower-rated property companies to stronger peers and banks. Global investors who bought $527 billion of Chinese stocks and bonds in the 15 months through June begin to sell.

While it's impossible to know for sure what would happen if Beijing allows Evergrande's downward spiral to continue unabated, China watchers are gaming out worst-case scenarios as they contemplate how much pain the Communist Party is willing to tolerate. Pressure to intervene is growing as signs of financial contagion increase.

"As a systemically important developer, an Evergrande bankruptcy would cause problems for the entire property sector," said Shen Meng, director of Chanson & Co., a Beijing-based boutique investment bank. "Debt recovery efforts by creditors would lead to fire sales of assets and hit housing prices. Profit margins across the supply chain would be squeezed. It would also lead to panic selling in capital markets."

Out Of Control Cops Violently Assault Republican L...
Did The Pentagon's Profit-Driven "Revolving Door" ...
 

Comments (0)

There are no comments posted here yet

Leave your comments

Posting comment as a guest. Sign up or login to your account.
Attachments (0 / 3)
Share Your Location

This organization operates on donations from users like you. We thank you for contributing.

Wait a minute, while we are rendering the calendar

Thank You

This organization operates on donations from users like you. We thank you for contributing.