The crisis affecting many real estate groups is already having far-reaching effects on China’s economy.
(Photo: Bloomberg)
Beijing Yu Liang chose dramatic words to describe the situation at Chinese real estate developer Vanke. “This year we are facing a life-and-death struggle in which there is no gray area,” the boss of what is currently the second-largest Chinese real estate developer by sales told his employees earlier this year.
Vanke, Shimao, China Fortune, Kaisa – the list of Chinese real estate companies in crisis is long. What began with the most prominent case of the highly indebted Evergrande group has long since spread to the entire industry.
Average new home prices in China’s 70 largest cities rose just 2.3 percent in January compared to the same period last year, according to Reuters news agency analysis of figures released by China’s National Bureau of Statistics on Monday. That was the weakest increase since December 2015. The market has cooled down significantly since the middle of last year.
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