China Evergrande Global mempunyai banyak utang atau bangkut, ya situasi yg
mungkin terjadi. Kalau semua kompani akan sukses, ya tidak ada akan ada "stock
market". Jumlah kompani adalah jutaan. Ada yg berhasil dan ada yg gagal. Kalau
ada yg gagal, ya suatu situasi yg normal. Didunia persaingan, tidak semua
kompani akan sukses, pasti akan ada yg gagal. "Survival of the fittest" adalah
hukum alam yg tidak akan bisa hilang/musnah.
Janganlah ber-berdelusi (delusion).
BH Jo
On Wednesday, September 22, 2021, 12:04:11 PM MDT, 'Tatiana Lukman' via
GELORA45 <[email protected]> wrote:
Wah, cilaka, agen Falun gong juga menyusup ke Washington Post, makanya
wartawannya nulis kayak gini!!! Mendingan pakai baju tambalan dan makan gaplek
dari pada utang sama cina mindring!! Itulah nasehat orang tua… Antek B.H. Jo
pernah heran tiongkok sosialis kasih kredit tanpa bunga…Ya itulah, karena
mentalitas dirinya seperti cina mindring yang hidup dari memeras roang melalui
rente!! Jadi tak masuk akal baginya, Mao kasih kredit tanpa rente!! Lihat
sendiri sekarang kekayaan, kemakmuran, kemewahan di China kapitalis pujaannya
yang dibangun di atas utang, seperti membangun kastil di atas pasir….
China Evergrande Global says it is facing "unprecedented difficulties" as it
struggles to tide over a liquidity crunch. (Noel Celis/AFP/Getty Images)
By
Jacob Bogage
Yesterday at 8:58 a.m. EDT
Property developer China Evergrande Group has hundreds of billions of dollars
in debt it can’t repay, roiling global financial markets this week on the
specter of default. The brewing crisis has implications that extend well beyond
the nation’s massive real estate sector. Here’s what you need to know:
WHAT TO KNOW
- What is China Evergrande Group?
- How did Evergrande end up in trouble?
- How does China’s housing market fit into the crisis?
- What do experts say is at stake for China?
- What does the crisis mean for global markets?
- Evergrande owns an electric car company, a theme park and even a soccer
team. What happens to them?
What is China Evergrande Group?
Evergrande is a behemoth development company based in Shenzhen, in southeastern
China, that rose to prominence constructing homes and apartment buildings just
as the country began to introduce private homeownership. It sustained itself on
a voracious appetite for expansion and a constant flow of cash — through
payments from consumers and prolific borrowing.
Founded in 1996, it owns more than 1,300 development projects in 280 cities,
and expanded into other major industries — it owns an electric carmaker, a
mineral extraction group, a soccer team and even a theme park — as the company
matured.
Its founder, the uber-wealthy Hui Ka Yan, proclaimed in a 2017 speech to
employees, “Development is the absolute principle,” parroting a famous
declaration by the late Chinese leader and revolutionary Deng Xiaoping. The
saying anchored a philosophy of unmitigated economic growth largely fueled by
the burgeoning real estate sector.
How did Evergrande end up in trouble?
Evergande is “overleveraged,” a fancy way of saying it holds too much debt. How
much? $300 billion worth. The company has presold 1.4 million apartments worth
more than $200 billion that it has not finished building. It’s begun paying its
bills by offloading unfinished projects to contractors, such as construction
companies or painters.
For a while, Evergrande’s debt was not a huge issue to Chinese regulators, said
Bill Bishop, who writes the Sinocism newsletter. And then it was. Chinese
President Xi Jinping in 2018 unveiled “three tough battles” for the nation’s
regulatory state: poverty, pollution and financial risk. Then in 2020,
regulators imposed “three red lines” on developers and their borrowing habits.
The more overleveraged a developer was, the less regulators would allow it to
borrow. Evergrande breached all three red lines, so regulators placed a hard
cap on its debt — the main way the company created liquidity.
“The real trigger was these rules that came into place, these three red lines,
that said, ‘This time we’re serious,’" Bishop said. “These real estate
companies can’t take on any more debt, and if you can’t take on any more debt,
then the game stops. It’s like musical chairs.”
How does China’s housing market fit into the crisis?
As the government loosened controls over the economy in the early 1990s and
created an opening for capitalist principles, land ownership quickly caught on.
Land became important collateral as individuals, businesses and financial
institutions were given leeway in the marketplace, Bishop said. As China’s
middle class grew and homeownership rates rose, the ever-increasing value of
land underpinned much of the new economic growth.
That’s where Evergrande came in; it quickly bought up large tracts of land from
local governments, which were eager to raise revenue to fund other elements of
Deng’s massive development philosophy. To build on that land, Evergrande did
lots of borrowing. It could justify that borrowing because the value of its
property kept rising, and it kept purchasing more land.
Meanwhile, those rising property values appeared to be good for Chinese home
buyers, because they almost constantly saw the value of their homes increase,
fueling the continued growth of the consumerist middle class.
In reality, experts say, the system just created a bubble.
What do experts say is at stake for China?
To be brief: a lot.
Close to a million Chinese home buyers purchased apartments from Evergrande
that the company apparently no longer has the means to finish building. Those
flats are likely to get completed, experts say, but that could take time.
Regulators may have to aid in the sale of those projects to other developers.
Evergrande’s crisis pierces the veil of the Chinese real estate sector and the
artificially valued tracts of land and development projects. Experts say that
could depress existing home values, which could dampen Chinese consumer
spending — a consequence that could reverberate worldwide. Chinese homeowners
view their property holdings much like American homeowners do: It’s their
largest investment, and as it grows in value, their long-term economic fortunes
improve. If it shrinks in value, Bishop said, “People will feel poor. There is
a chance that it could start somewhat of a prolonged slowdown.”
Evergrande’s fall could also be a shot across the bow for other Chinese
developers. It could show that the government in Beijing is willing to let
massive companies fail if they take on too much risk, potentially persuading
Evergrande’s contemporaries to offload liabilities. Experts are watching the
government’s response to see what tone regulators set. But that could take a
few days. Much of China’s government and financial apparatus is off until Sept.
22 for the Mid-Autumn Festival, one of the most important holidays on the
Chinese calendar.
The first real test for the company will come almost as soon as the country
reopens. Evergrande is due to make an $83 million interest payment on Thursday,
and there’s serious doubt as to whether it has the cash to avoid a default.
What does the crisis mean for global markets?
Global markets plunged Monday on the Evergrande developments, with the Dow
Jones industrial average plunging as much as 971 points before cutting its
losses to 614 points, a 1.8 percent drop on the day. The Hang Seng Index in
Hong Kong skidded 3.3 percent. Meanwhile gold, a traditional safe harbor for
investors, jumped nearly 0.8 percent. All that action is a good reflection of
the jitters traders are feeling.
Evergrande has its hands in so many other industries in China — wealth
management, hospitality, media, natural resources — that some experts worry
about a “contagion,” or spillover effect. In other words, if one major economic
pillar collapses, will it spread to other markets or regions?
Another concern is credit markets. Evergrande has done so much borrowing, and
so many lenders are at risk of getting burned, would its potential default have
a ripple effect for other borrowers? On both of these questions, experts say,
it’s still too soon to tell.
But troubling signs already are emerging: Remember, hundreds of millions of
Chinese homeowners who could see their property values drop, meaning there’s a
good chance they’ll rein in spending. Global consumer markets — on everything
from clothes to electronics to food — rely on the prolific buying power of the
Chinese middle class. If China is poised to spend much less on consumer goods,
there will be economic ramifications around the world.
Evergrande owns an electric car company, a theme park and even a soccer team.
What happens to them?
Evergrande had a taste for expansion beyond its developments. It owns an
electric carmaker, a mineral extraction company, even a theme park and soccer
team. Experts say many of those businesses grew out of the company’s voracious
land appetite: If you own a car company, you need a factory, and you need land
for that factory. If that land increases in value, you can borrow against it to
fund other projects.
In the rush to unburden itself from its liabilities, Evergrande is reportedly
exploring sales for these assets, but buyers are hard to come by. Experts say
many could be worried about the financing for any deal, or if regulators will
get involved to seize assets to pay off creditors.
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