Evergrande was postponed seven times and was finally liquidated, bursting the real estate bubble : China Evergrande was postponed seven times and was finally liquidated, bursting the real estate bubble : China

Evergrande was postponed seven times and was finally liquidated, bursting the real estate bubble : China

Evergrande was postponed seven times and was finally liquidated, bursting the real estate bubble : China

Evergrande was postponed seven times and was finally liquidated, bursting the real estate bubble

After seven postponements, the Hong Kong High Court issued a winding-up order against Evergrande Group this week. Some analysts believe that the liquidation of Evergrande symbolizes the bursting of China's real estate bubble, and it is difficult for real estate companies with high debts to count on the government to rescue them.

A Hong Kong court issued a liquidation order to China Evergrande, suspending trading of Evergrande shares
Xu Jiayin becomes an "enemy of the people". Who is behind the scenes at Evergrande?
The relationship between Evergrande and the government is "constantly being cut off and chaotic." Will the hard-earned money of millions of families be wiped out?
The Evergrande liquidation case will be heard again in the Hong Kong High Court on January 29. According to Hong Kong media reports, the judge stated that China Evergrande’s debt restructuring plan lacked progress and the company was insolvent, so he officially ordered Evergrande to be liquidated. China Evergrande, Evergrande Automobile, and Evergrande Property were also suspended from the stock market that day.

The Wall Street Journal reported that Top Shine Global, one of Evergrande’s overseas creditors, filed an application to liquidate Evergrande in June 2022. Since then, Evergrande’s liquidation hearings have been postponed many times. Chinese regulators blocked an earlier restructuring deal after banning Evergrande from issuing new bonds, a key part of the plan.

The report pointed out that "Evergrande's default was a watershed for China's real estate industry. The incident also triggered a liquidity crisis in the industry. Since then, more than 50 Chinese real estate developers have defaulted, and thousands of industry personnel have lost their jobs. ."

The Chinese media "21st Century Economy" quoted Evergrande Group CEO Sean Xiao as saying in response to being ordered to liquidate that Evergrande Real Estate has been investigated by the China Securities Regulatory Commission, and the actual controllers of the group have been subject to compulsory measures in accordance with the law for suspected violations of laws and crimes. The company has also been It is believed that the relevant legal conditions for key aspects of overseas debt restructuring cannot be met. These circumstances have continuously intensified various uncertainties, making it difficult to implement the debt restructuring plan in the end. "I've tried my best and I'm very sorry," he said.

Chinese financial experts believe the impact of the incident will be limited

Chinese media interviewed many financial experts in an attempt to reduce the lethality of Evergrande’s liquidation. Li Shuguang, a professor at China University of Political Science and Law, told the Securities Times: "China Evergrande was ordered to be liquidated, and its direct impact on the rights and interests of domestic bondholders is limited."

Wang Chunfei, associate professor at the School of Accountancy at China's Central University of Finance and Economics, believes: "The problems of Evergrande Group are an isolated phenomenon in the real estate industry."

Evergrande sounds the alarm: real estate companies have lost their capital chain and can only support themselves independently

The commander, a financial scholar, told this station that generally speaking, companies will only be liquidated if they cannot come up with an asset restructuring plan, which shows that no one came to save Evergrande after it exploded last year, and all parties saw the collapse of this real estate giant.

"Even if there are state-owned real estate companies like Poly Real Estate that have Chinese government background, don't expect the Chinese government to save them from the fire in the next tightening of belts," the commander said. Evergrande's liquidation is a knock on the Chinese real estate giant. This is a wake-up call. In the future, we can only rely on ourselves and bear business risks. If there is a break in the capital chain and liquidity risks, the Chinese government will most likely not make substantial intervention.

The commander said that the Evergrande explosion has cast a huge shadow on China's real estate transactions. In the long run, it will not continue to be as rigid as China's real estate sector regulates, but will drag down the real estate market bubble to begin to burst, and also tear apart the picture behind the glamorous Chinese real estate market.

Evergrande was liquidated, and the leveraged debt model of Chinese real estate companies ended

Financial blogger "Nangongmenwai Zhuque Bridge" believes that the incident reflects that it has now reached the moment of liquidation. Nothing is too big to fail, and its rise and fall are also sudden: "The model of continuous mortgage borrowing is in the era. The turning point is crisp and everything should be over.”

Liu Xuesong, a commentator for Zhejiang Daily with millions of followers on Weibo, wrote that what can be seen is that many people have stepped on the red line of the law. The market cannot save them, and there is no way to avoid death. …Liquidation, repayment, handing over the building, and severe punishment in accordance with the law. Only the rule of law can heal.

Financial blogger "Red Blue White Tulip" analyzed that "overseas creditors may not get a penny."

Since the first order of debt repayment in the liquidation of a Hong Kong company is priority debt, that is, employee salaries, social insurance and taxation, etc., the market value of Evergrande Property and Evergrande Automobile held by Evergrande is less than 3 billion yuan, even if the resumption of trading is not taken into account. The stock price plummeted and liquidation losses, and the RMB 3 billion may not be enough to repay the priority debt after paying the liquidation costs.


The Hong Kong government activates Article 23 of the Basic Law to legislate new crimes of "rebellion" and "foreign interference"

The Hong Kong government announced on Tuesday (January 30) the launch of a legislative consultation on Article 23 of the Basic Law, covering acts such as treason, rebellion, incitement to rebellion, espionage and theft of state secrets, advocating the addition of "rebellion crimes" and "overseas interference crimes"; expanding "State secrets" are defined as publishing internal information is also illegal. For crimes related to "espionage", it is recommended to add the crime of "joining or supporting overseas intelligence organizations or accepting benefits from overseas intelligence organizations, etc." It is not only illegal to be a member of an organization, but also to accept benefits provided by the organization and provide financial support to the organization; and prohibit any People cooperate with foreign forces to interfere in Hong Kong elections and other behaviors.

At the same time, it is recommended to expand the power of the Secretary for Security to ban foreign or Taiwanese organizations from operating in Hong Kong for national security reasons if there is reasonable belief. At the same time, it is recommended to write "concealed treason" in statutory law, and it is also illegal for anyone who knows about "treasonous" intentions and fails to report them.

Chief Executive Lee Ka-chiu said that Hong Kong faces "overseas" and "domestic" national security risks, and named the CIA and British intelligence agencies as having done a lot of work against China and Hong Kong. He also said that foreign agents and Hong Kong independence ideas are still lurking. In Hong Kong society, national security risks can arise suddenly, and we must do a good job in safeguarding national security as soon as possible. We emphasize that Article 23 is not targeted at individual countries. We hope that others will not offend us, but we must also protect ourselves.

At the same time as the press conference to launch Article 23 legislation, Hong Kong stocks fell by more than 300 points. How to evaluate the impact of this legislation on the economy and whether it will trigger another wave of immigration? Li Jiachao said that Article 23 will help maintain the security and stability of Hong Kong. A stable business environment will definitely be beneficial to economic development, and social security and stability will also help the flow of people.

As for why the consultation period for this legislation is only less than a month, which is significantly reduced compared to the consultation period in 2003, Li Jiachao said that Hong Kong society has reached a consensus on the legislation. He also said that the Hong Kong government has the responsibility to implement the National People’s Congress’s “528 Decision” and the “Hong Kong The National Security Law improves the legal system and enforcement mechanisms for safeguarding national security in the Hong Kong Special Administrative Region to effectively safeguard national security.

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