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 Vanke’s situation. “This year we are facing a life-and-death struggle in which there is no gray area,” the boss of the second-largest Chinese real estate developer by sales said to his employees at the beginning of the year.
Vanke, Shimao, China Fortune, Kaisa – the list of Chinese real estate companies in crisis is long. What began with the most prominent case, the case of the highly indebted Evergrande group, has long since spread to the entire industry.
The average prices for new homes in the 70 largest Chinese cities rose by just 2.3 percent in January compared to the same period last year, according to an analysis by the Reuters news agency. The basis are figures published by the Chinese National Statistics Office 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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