Debt-laden local government financing vehicles face soaring bond yields
These projects, which had questionable profitability to begin with, were hit hard by the country’s real estate slump and its zero-COVID pandemic restrictions. The company’s cash flows deteriorated, and it has faced numerous lawsuits, including over unpaid bills.
Hasn’t this been a problem for years? I seem to remember stories like this from 10 years ago, but for different reasons.
There were empty cities, but they usually got filled within a few years of construction. Now, it is at the point where the cities aren’t being finished.
China Evergrande filed for bankruptcy today, it’s over.
I thought evergrande crashed and burned like 2 years ago. How is this still going on?
2 years ago was the default, today was bankruptcy.
Defaulting means youre behind on payments. Bankruptcy is when you file for methods to discharge the payments.
One developer was so broke, but it still tried to make do:
The group’s real estate development income plummeted from 1.1 billion yuan in 2021 to zero in 2022, according to China Chengxin Credit Ratings. It has even started selling corn and jujube fruit as a new business.
