Latest news with #ChinaEvergrande
Bloomberg
3 days ago
- Business
- Bloomberg
China's Latest Data Sound Alarm for Xi on Consumer Fragility
Five years after China began a push to rein in the nation's debt-addicted real-estate developers, its property market has yet to find the bottom. Prices of new and existing homes have been falling more or less continuously since August 2021, with the decline accelerating last month when it comes to new units. Data this week also showed that year-to-date property investment contracted by the most since the initial Covid shock in 2020. Another bleak milestone this week: the one-time No. 1 developer, China Evergrande, is now set to be delisted from its exchange.
NBC News
6 days ago
- Business
- NBC News
China Evergrande to be delisted from Hong Kong stock exchange following debt woes
HONG KONG — The severely indebted real estate developer China Evergrande, already in the process of liquidation, said Tuesday that it will be delisted from Hong Kong 's stock exchange on Aug. 25, another setback to mainland China's property sector. Evergrande was the world's most heavily indebted real estate developer, with over $300 billion owed to banks and bondholders, when the court handed down a liquidation order in January 2024. The court had ruled that the company had failed to provide a viable restructuring plan for its debts, which fueled fears about China's rising debt burden, and trading of its shares has been halted since the ruling. The Chinese territory's rules stipulate that the listing of companies may be canceled if trading in their securities has remained suspended for 18 months consecutively. China Evergrande Group received a letter Aug. 8 from the Hong Kong stock exchange notifying the firm of its decision to cancel the listing as trading had not resumed by July 28. The last day of the listing will be Aug. 22 and Evergrande will not apply for a review of the decision, the company said in a statement. 'All shareholders, investors and potential investors of the company should note that after the last listing date, whilst the share certificates of the shares will remain valid, the shares will not be listed on, and will not be tradeable on the Stock Exchange,' the statement said. Evergrande is among scores of developers that defaulted on debts after Chinese regulators cracked down on excessive borrowing in the property industry in 2020. Unable to obtain financing, their vast obligations to creditors and customers became unsustainable. The crackdown also tipped the property industry into crisis, dragging down the world's second-largest economy and rattling financial systems in and outside China. Once among the nation's strongest growth engines, the industry is struggling to exit a prolonged downturn. Home prices in China have continued to fall even after the introduction of supportive measures by policymakers. The Hong Kong court system has been dealing with liquidation petitions against some Chinese property developers, including one of the largest Chinese real estate companies, Country Garden, which is expected to have another hearing in January. China South City Holdings, a smaller property developer, was also ordered to liquidate on Monday. Evergrande, founded in the mid-1990s by Hui Ka Yan, also known as Xu Jiayin, had over 90% of its assets on the Chinese mainland, according to the 2024 ruling. The firm was listed in Hong Kong in 2009 as 'Evergrande Real Estate Group' and suspended its share trading on Jan. 29, 2024, at 0.16 Hong Kong dollars ($0.02). Its liquidators said in a progress report that they received debt claims totaling $45 billion as of July 31, much higher than the some $27.5 billion of liabilities disclosed in December 2022, and that the new figure was not final. The liquidators said they had assumed control of over 100 companies within the group and entities under their direct management control with collective assets valued at $3.5 billion as of Jan. 29, 2024. They said an estimate of the amounts that may ultimately be realized from these entities was not available yet. About $255 million worth of assets have been sold, the liquidators said, calling the realization 'modest.' Of this amount, $244 million was derived from subsidiaries' assets, and not all of them will be available to the company, given the complex ownership structures of the assets. 'The liquidators believe that a holistic restructuring will prove out of reach, but they will, of course, explore any credible possibilities in this regard that may present themselves,' they said. Hui, Evergrande's founder, was detained in China in September 2023 on suspicion of committing crimes, adding to the company's troubles. In 2024, the China Securities Regulatory Commission issued a fine of 4.2 billion yuan (about $584 million) against the firm's subsidiary, Hengda Real Estate Group Company, over violations including falsifying financial records. Hui was fined 47 million yuan ($6.5 million) and barred from China's securities markets for life. Some other executives were also penalized. Chinese authorities in September 2024 banned the accounting firm PwC for six months and fined the company more than 400 million yuan ($56.4 million) over its involvement in the audit of the collapsed property developer.
Bloomberg
02-06-2025
- Business
- Bloomberg
PwC Troubles in China Deepen With Exit of Hong Kong Partners
PricewaterhouseCoopers LLP troubles are now deepening in Hong Kong as the firm is wrestling with the consequences of its audits of China Evergrande Group. Over the coming month, at least 10 partners in the city are poised to leave, adding to the 20 that have already exited the firm in the past six months, according to people familiar with the matter. On the Chinese mainland, some 77 partners have left their roles since December, according to filings with the unified supervision platform of the Chinese CPA profession.
The Age
27-05-2025
- Automotive
- The Age
Could China's electric carmakers bring on another Evergrande moment?
With Xi Jinping strongly resistant to measures to stimulate consumption and the trade war with America clouding the economy's outlook, China's economy and household consumption will, without extraordinary measures, continue to wane and limit the growth rate of EV sales. Loading BYD's attempt to stimulate demand came after its sales have been running at half the very ambitious targets it set itself for this year. It was targeting a 30 per cent increase in sales, but they are tracking at half that growth rate. BYD had hoped that offering its new 'God's Eye' autonomous driving system as a standard feature would drive a big surge in sales, but that hasn't eventuated. With most of the other major Chinese electric carmakers also budgeting for significant growth, there is significant oversupply and a massive increase in dealers' inventories. As of last month, there were about 3.5 million cars – nearly two months' supply – in unsold stocks, the most in two and a half years. Dealers are going broke, along with suppliers to the sector who are being squeezed by carmakers that are themselves under extreme pressure. It's little wonder, then, that the chairman of Great Wall Motor, We Jianjun, said last week the Chinese auto industry was experiencing its own 'Evergrande.' China Evergrande, the world's most indebted property developer, formally collapsed last year, but was in crisis from the moment Xi introduced the 'three red lines' restrictions on developers' debt levels in August 2020. It was the first of the major dominoes in China's property industry to fall, with the fallout then spreading throughout the construction sector, suppliers and property buyers and subsequently hitting the wider economy. The EV sector in China needs even more consolidation and more sustainable earnings for the remaining players, while China's authorities, as was the case in the property sector, need to do something about the large-scale misallocation of capital and resources -- including the distortions provided by state incentives and mandates -- if the continuing rationalisation of the industry is to remain reasonably orderly. Loading What the oversupply and ferocious competition in the sector has done, however, is drive continuous innovation, with China's electric cars now providing the world's leading-edge EV technology from batteries to software, and global dominance. The companies that are profitable, or have some prospect of achieving profitability, are having success in offshore markets, where the gross margins are far fatter than in their home market. Indeed, with its international success BYD is now more profitable than Tesla, whose profitability has slumped dramatically. The over-production of Chinese EVs and the cost advantage they have over their international competitors because of the scale of the domestic industry, the support they get from central and local governments, the leadership they have in battery technologies and the stranglehold China has on critical raw materials has generated some backlash in other markets. Governments are looking nervously at the oversupply within China, fearing it will be dumped into their markets and wipe out their own auto industries. The US, with 100 per cent tariffs on China's EVs, is effectively closed to the Chinese exports. Europe was open and, with its commitment to phasing out internal combustion vehicles, attractive – until the deluge of Chinese electric cars proved too much for the European Union, which slapped tariffs of up to 35 per cent on imports from China, citing the over-capacity and government subsidies. Even with those tariffs, the margins available in the EU are far greater than in China's domestic market. Some of the Chinese EV companies are wiping out, or at least softening, the losses in their home market with profits in Europe. BYD and some of its peers are also scrambling to build factories within the EU. BYD, which last month overtook Tesla for the first time in EV sales in Europe, will open a plant in Hungary later this year to circumvent the tariff wall and capitalise on its cost and technology advantages over local carmakers. The Chinese EV makers' potential in Europe might be slightly blunted by the EU's decision to relax its planned tightening of emissions standards as part of its longer-term plan to phase out internal combustion engines. The EU is trying to protect its domestic auto industry from both the Chinese invasion and the potential fallout from its own trade confrontation with an aggressively protectionist Trump America. It has given its carmakers a window of three years now to meet tough new standards that were to be implemented this year. Loading While Donald Trump has now deferred his threatened 50 per cent tariffs on EU exports until July 9, Europe's car industry is the most obvious target of US trade sanctions. Because the US market is effectively closed to Chinese carmakers, they are now looking to their own region, South America and Australia to deploy their excess capacity. But they're also facing pushback in some of those markets such as Brazil, which unlike Australia has a domestic car industry. Meanwhile, in some Asian markets stocks of unsold EVs are piling up as demand has already been overwhelmed by supply. Rising protectionism and the prospect of a significant slowdown in global growth as Trump's trade war with everyone is starting to bite are likely to weaken international demand for EVs, even cheap ones from China. That would create even more pressure on the overwhelming majority of loss-making manufacturers to exit the sector or be consolidated with the handful that are, or could be, profitable. It would be a positive development for China, which doesn't want another Evergrande, as well as the rest of the world, which would otherwise be facing a massive dump of Chinese cars that could undermine other nations' car industries and all those who depend on it.
Sydney Morning Herald
27-05-2025
- Automotive
- Sydney Morning Herald
Could China's electric carmakers bring on another Evergrande moment?
With Xi Jinping strongly resistant to measures to stimulate consumption and the trade war with America clouding the economy's outlook, China's economy and household consumption will, without extraordinary measures, continue to wane and limit the growth rate of EV sales. Loading BYD's attempt to stimulate demand came after its sales have been running at half the very ambitious targets it set itself for this year. It was targeting a 30 per cent increase in sales, but they are tracking at half that growth rate. BYD had hoped that offering its new 'God's Eye' autonomous driving system as a standard feature would drive a big surge in sales, but that hasn't eventuated. With most of the other major Chinese electric carmakers also budgeting for significant growth, there is significant oversupply and a massive increase in dealers' inventories. As of last month, there were about 3.5 million cars – nearly two months' supply – in unsold stocks, the most in two and a half years. Dealers are going broke, along with suppliers to the sector who are being squeezed by carmakers that are themselves under extreme pressure. It's little wonder, then, that the chairman of Great Wall Motor, We Jianjun, said last week the Chinese auto industry was experiencing its own 'Evergrande.' China Evergrande, the world's most indebted property developer, formally collapsed last year, but was in crisis from the moment Xi introduced the 'three red lines' restrictions on developers' debt levels in August 2020. It was the first of the major dominoes in China's property industry to fall, with the fallout then spreading throughout the construction sector, suppliers and property buyers and subsequently hitting the wider economy. The EV sector in China needs even more consolidation and more sustainable earnings for the remaining players, while China's authorities, as was the case in the property sector, need to do something about the large-scale misallocation of capital and resources -- including the distortions provided by state incentives and mandates -- if the continuing rationalisation of the industry is to remain reasonably orderly. Loading What the oversupply and ferocious competition in the sector has done, however, is drive continuous innovation, with China's electric cars now providing the world's leading-edge EV technology from batteries to software, and global dominance. The companies that are profitable, or have some prospect of achieving profitability, are having success in offshore markets, where the gross margins are far fatter than in their home market. Indeed, with its international success BYD is now more profitable than Tesla, whose profitability has slumped dramatically. The over-production of Chinese EVs and the cost advantage they have over their international competitors because of the scale of the domestic industry, the support they get from central and local governments, the leadership they have in battery technologies and the stranglehold China has on critical raw materials has generated some backlash in other markets. Governments are looking nervously at the oversupply within China, fearing it will be dumped into their markets and wipe out their own auto industries. The US, with 100 per cent tariffs on China's EVs, is effectively closed to the Chinese exports. Europe was open and, with its commitment to phasing out internal combustion vehicles, attractive – until the deluge of Chinese electric cars proved too much for the European Union, which slapped tariffs of up to 35 per cent on imports from China, citing the over-capacity and government subsidies. Even with those tariffs, the margins available in the EU are far greater than in China's domestic market. Some of the Chinese EV companies are wiping out, or at least softening, the losses in their home market with profits in Europe. BYD and some of its peers are also scrambling to build factories within the EU. BYD, which last month overtook Tesla for the first time in EV sales in Europe, will open a plant in Hungary later this year to circumvent the tariff wall and capitalise on its cost and technology advantages over local carmakers. The Chinese EV makers' potential in Europe might be slightly blunted by the EU's decision to relax its planned tightening of emissions standards as part of its longer-term plan to phase out internal combustion engines. The EU is trying to protect its domestic auto industry from both the Chinese invasion and the potential fallout from its own trade confrontation with an aggressively protectionist Trump America. It has given its carmakers a window of three years now to meet tough new standards that were to be implemented this year. Loading While Donald Trump has now deferred his threatened 50 per cent tariffs on EU exports until July 9, Europe's car industry is the most obvious target of US trade sanctions. Because the US market is effectively closed to Chinese carmakers, they are now looking to their own region, South America and Australia to deploy their excess capacity. But they're also facing pushback in some of those markets such as Brazil, which unlike Australia has a domestic car industry. Meanwhile, in some Asian markets stocks of unsold EVs are piling up as demand has already been overwhelmed by supply. Rising protectionism and the prospect of a significant slowdown in global growth as Trump's trade war with everyone is starting to bite are likely to weaken international demand for EVs, even cheap ones from China. That would create even more pressure on the overwhelming majority of loss-making manufacturers to exit the sector or be consolidated with the handful that are, or could be, profitable. It would be a positive development for China, which doesn't want another Evergrande, as well as the rest of the world, which would otherwise be facing a massive dump of Chinese cars that could undermine other nations' car industries and all those who depend on it.
