Both gold and real estate are safe inflation hedges. Gold offers high liquidity and 8 to 10 per cent returns during inflation. Real estate generates rental income and appreciates.


Both gold and real estate are safe inflation hedges. Gold offers high liquidity and 8 to 10 per cent returns during inflation. Real estate generates rental income and appreciates.

Real estate vs gold: Which is safer during inflation?

Evergrande founder Hui Ka Yan pleaded guilty to multiple fraud charges in a landmark trial that marks another chapter in the spectacular collapse of what was once China’s largest real estate developer. Also known as Xu Jiayin, the 67-year-old stood trial alongside the company he founded. At the Shenzhen Intermediate People’s Court, he pleaded guilty to all fraud charges and expressed remorse in his final statement. He might receive a life term in jail and confiscation of property for some of the serious charges, such as illegal fundraising and bribery. The verdict is awaited. How did Evergrande collapse? Here is that story:<h2>A fundraising fraud: Charges against Hui Ka Yan and Evergrande</h2>Hui and Evergrande faced charges of taking deposits from the public without authorisation. The fundraising fraud included misuse or embezzlement of corporate assets and funds. They were also charged with illegally issuing or extending loans and the fraudulent issuance of securities. Other charges include corporate bribery.Evergrande diverted pre-sale funds paid up by homebuyers for construction of projects to new projects instead, leading to hundreds of unfinished properties across China.Regulatory findings from 2024 showed the company had inflated 2019 and 2020 revenues by a combined 564 billion yuan, or nearly $78 billion, enabling fraudulent bond issuance.Hui was detained by authorities in September 2023 on suspicion of the crimes. In March 2024, China’s securities regulator, CSRC, fined him 47 million yuan, or around $6.5 million, banned him for life from the securities market, and penalised the company heavily for the accounting fraud.Liquidators are seeking recovery of $6 billion in dividends and remuneration paid to Hui and his former spouse.Also read: <a href="https://www.wionews.com/world/chinese-real-estate-firm-evergrandes-shares-dive-after-chairman-hui-ka-yan-cuts-stake-432892">Chinese real estate firm Evergrande's shares dive after Chairman Hui Ka Yan cuts stake</a>&nbsp;<h2>How Hui rose to be Asia’s richest man, with Evergrande fortunes</h2>Born into poverty in the rural Henan province and raised by his grandmother, Hui went on to build Evergrande, founded in 1996, into a real estate empire. The Guangzhou-based company, at its peak, was valued at over $50 billion. In 2017, Hui was Asia’s richest person, with a net worth of $42.5 billion.Under Hui, Evergrande expanded aggressively into electric vehicles, football, food and drinks, and other sectors.<h2>Evergrande: How China’s biggest real estate firm collapsed</h2>Evergrande’s downfall was the result of a classic high-leverage real estate model that continued until regulators stepped in. The business model was debt-fuelled. Having borrowed heavily to buy land, Evergrande pre-sold unfinished apartments to buyers who often paid up to 90 per cent upfront. This money was then used to buy more land.This continuous expansion loop model worked during China’s property boom, and by 2020, Evergrande became China’s largest developer.Also read: <a href="https://www.wionews.com/business-economy/ditched-by-communist-party-chinese-billionaire-loses-93-per-cent-of-fortune-554153">Ditched by Communist Party, Chinese billionaire loses 93 per cent of his fortune</a>&nbsp;<h2>Evergrande failed China’s ‘Three Red Lines’ test</h2>Things changed with China’s “Three Red Lines” policy in 2020. This imposed debt limits for developers to curb systemic risks. The three aspects were: debt-to-asset ratio should be less than or equal to 70 per cent; net debt-to-equity ratio should be 100 per cent; and cash-to-short-term debt ratio should be greater than 1. Evergrande failed all three of the red line tests. Its borrowing ability was severely restricted, cutting off its lifeblood.<h2>A liquidity crisis and default of Evergrande, 2021</h2>Under regulatory scrutiny, Evergrande could neither borrow nor complete its projects. Even as the Covid pandemic hit China and the rest of the world, Evergrande stopped paying suppliers and contractors and halted construction on many sites. In late 2021, Evergrande defaulted on paying interest on offshore bonds. Soon, its total liabilities reached 2.39 trillion yuan, or $330 billion, equivalent to around 2 per cent of China’s GDP. Evergrande owed foreign creditors around $25 billion.<h2>Evergrande almost brought down the entire real estate sector in China</h2>Nearly 1 million homebuyers were left with unfinished apartments across 1,300 Evergrande projects in 280 cities. Mass protests and more than 1,300 lawsuits followed. Evergrande was the first domino: more than 50 other real estate developers defaulted on debt payments. In August 2025, Evergrande was delisted from the Hong Kong Stock Exchange after its shares lost nearly 99 per cent of their value. Talks for debt restructuring collapsed, and in 2024, a Hong Kong court ordered liquidation of Evergrande, the largest in Chinese corporate history.&nbsp;<a href="https://www.wionews.com/videos/china-evergrande-delisted-china-s-300-billion-property-collapse-1756142932647/embed">https://www.wionews.com/videos/china-evergrande-delisted-china-s-300-billion-property-collapse-1756142932647/embed</a><h2>Accounting fraud behind Evergrande collapse</h2>To keep borrowing and meet targets, Evergrande forged sales and profit numbers. Hundreds of billions of yuan were overstated. This allowed it to continue issuing bonds while hiding the true debt burden.The guilty plea cemented Hui’s personal accountability.Evergrande liquidation proceedings are continuing. Unfinished projects may be completed or sold to other developers with regulatory support. But Evergrande and Hui have become a cautionary tale for China’s property market that once overheated. The realities of Chinese household wealth, local government finances, and investor confidence were also exposed by the fall of Evergrande.&nbsp;The saga is seen as a symbol of the end of China’s debt-fuelled real estate boom era.

Evergrande founder Hui Ka Yan pleaded guilty to fraud as China’s biggest property developer collapsed under massive debt. Accounting fraud and unfinished projects at Evergrande had triggered a wider real estate crisis in China. Here is the story of its fall

Evergrande founder Hui Ka Yan pleaded guilty to multiple fraud charges in a landmark trial that marks another chapter in the spectacular collapse of what was once China’s largest real estate developer. Also known as Xu Jiayin, the 67-year-old stood trial alongside the company he founded. At the Shenzhen Intermediate People’s Court, he pleaded guilty to all fraud charges and expressed remorse in his final statement. He might receive a life term in jail and confiscation of property for some of the serious charges, such as illegal fundraising and bribery. The verdict is awaited. How did Evergrande collapse? Here is that story: A fundraising fraud: Charges against Hui Ka Yan and Evergrande Hui and Evergrande faced charges of taking deposits from the public without authorisation. The fundraising fraud included misuse or embezzlement of corporate assets and funds. They were also charged with illegally issuing or extending loans and the fraudulent issuance of securities. Other charges include corporate bribery. Evergrande diverted pre-sale funds paid up by homebuyers for construction of projects to new projects instead, leading to hundreds of unfinished properties across China. Regulatory findings from 2024 showed the company had inflated 2019 and 2020 revenues by a combined 564 billion yuan, or nearly $78 billion, enabling fraudulent bond issuance. Hui was detained by authorities in September 2023 on suspicion of the crimes. In March 2024, China’s securities regulator, CSRC, fined him 47 million yuan, or around $6.5 million, banned him for life from the securities market, and penalised the company heavily for the accounting fraud. Liquidators are seeking recovery of $6 billion in dividends and remuneration paid to Hui and his former spouse. Also read: Chinese real estate firm Evergrande's shares dive after Chairman Hui Ka Yan cuts stake How Hui rose to be Asia’s richest man, with Evergrande fortunes Born into poverty in the rural Henan province and raised by his grandmother, Hui went on to build Evergrande, founded in 1996, into a real estate empire. The Guangzhou-based company, at its peak, was valued at over $50 billion. In 2017, Hui was Asia’s richest person, with a net worth of $42.5 billion. Under Hui, Evergrande expanded aggressively into electric vehicles, football, food and drinks, and other sectors. Evergrande: How China’s biggest real estate firm collapsed Evergrande’s downfall was the result of a classic high-leverage real estate model that continued until regulators stepped in. The business model was debt-fuelled. Having borrowed heavily to buy land, Evergrande pre-sold unfinished apartments to buyers who often paid up to 90 per cent upfront. This money was then used to buy more land. This continuous expansion loop model worked during China’s property boom, and by 2020, Evergrande became China’s largest developer. Also read: Ditched by Communist Party, Chinese billionaire loses 93 per cent of his fortune Evergrande failed China’s ‘Three Red Lines’ test Things changed with China’s “Three Red Lines” policy in 2020. This imposed debt limits for developers to curb systemic risks. The three aspects were: debt-to-asset ratio should be less than or equal to 70 per cent; net debt-to-equity ratio should be 100 per cent; and cash-to-short-term debt ratio should be greater than 1. Evergrande failed all three of the red line tests. Its borrowing ability was severely restricted, cutting off its lifeblood. A liquidity crisis and default of Evergrande, 2021 Under regulatory scrutiny, Evergrande could neither borrow nor complete its projects. Even as the Covid pandemic hit China and the rest of the world, Evergrande stopped paying suppliers and contractors and halted construction on many sites. In late 2021, Evergrande defaulted on paying interest on offshore bonds. Soon, its total liabilities reached 2.39 trillion yuan, or $330 billion, equivalent to around 2 per cent of China’s GDP. Evergrande owed foreign creditors around $25 billion. Evergrande almost brought down the entire real estate sector in China Nearly 1 million homebuyers were left with unfinished apartments across 1,300 Evergrande projects in 280 cities. Mass protests and more than 1,300 lawsuits followed. Evergrande was the first domino: more than 50 other real estate developers defaulted on debt payments. In August 2025, Evergrande was delisted from the Hong Kong Stock Exchange after its shares lost nearly 99 per cent of their value. Talks for debt restructuring collapsed, and in 2024, a Hong Kong court ordered liquidation of Evergrande, the largest in Chinese corporate history. https://www.wionews.com/videos/china-evergrande-delisted-china-s-300-billion-property-collapse-1756142932647/embed Accounting fraud behind Evergrande collapse To keep borrowing and meet targets, Evergrande forged sales and profit numbers. Hundreds of billions of yuan were overstated. This allowed it to continue issuing bonds while hiding the true debt burden.The guilty plea cemented Hui’s personal accountability. Evergrande liquidation proceedings are continuing. Unfinished projects may be completed or sold to other developers with regulatory support. But Evergrande and Hui have become a cautionary tale for China’s property market that once overheated. The realities of Chinese household wealth, local government finances, and investor confidence were also exposed by the fall of Evergrande. The saga is seen as a symbol of the end of China’s debt-fuelled real estate boom era.

Evergrande founder Hui Ka Yan pleaded guilty to fraud as China’s biggest property developer collapsed under massive debt. Accounting fraud and unfinished projects at Evergrande had triggered a wider real estate crisis in China. Here is the story of its fall

Evergrande founder Hui Ka Yan pleads guilty to fraud: How China’s biggest real estate firm went down due to greed and debt

China's real estate giant, Evergrande, and its founder, Hui Ka Yan, are ensnared in a $78 billion fraud scandal.<o:p></o:p>

According to reports, the allegations, accusing Evergrande of inflating revenues over two years, have prompted swift regulatory action, with the&nbsp;China Securities Regulatory Commission (CSRC), slapping Evergrande's mainland entity, Hengda Real Estate, with a record $583.5 million fine. <o:p></o:p>

Moreover, Hui Ka Yan faces a lifetime ban from China's financial markets, marking a precipitous fall from grace for the once-revered magnate.<o:p></o:p>

Accusations and penalties<o:p></o:p>

The CSRC's punitive measures stem from allegations of financial misconduct orchestrated by Hui Ka Yan. <o:p></o:p>

The regulatory body contends that Hui directed Hengda Real Estate to "falsely inflate" its annual results in 2019 and 2020, artificially burnishing the company's financial health. <o:p></o:p>

This misconduct has not gone unpunished; Hui Ka Yan, once lauded as China's wealthiest individual, now faces a $6.5 million fine, alongside the discredit of a lifetime ban. <o:p></o:p>

Evergrande's chairman, under heightened scrutiny since September 2023, faces mounting legal woes as investigations into suspected "illegal crimes" continue to unfold. <o:p></o:p>

Despite mounting pressure, Evergrande remains silent, declining to address inquiries from media outlets seeking clarity on the unfolding scandal. <o:p></o:p>

Legal troubles and financial strain<o:p></o:p>

Evergrande's legal complexities have only compounded its financial woes, culminating in a court-ordered liquidation in Hong Kong earlier this year. <o:p></o:p>

This directive has cast a shadow over the company's once-stellar reputation, representative of China's property boom. <o:p></o:p>

The specter of Evergrande's downfall looms large, indicating broader structural challenges within China's real estate sector. <o:p></o:p>

Hui Ka Yan's abrupt descent from the pinnacle of corporate success to the depths of regulatory scrutiny highlights the gravity of the situation. <o:p></o:p>

Financial repercussions and market turbulence<o:p></o:p>

The after effects of Evergrande's scandal extend far beyond the confines of the company's boardroom, echoing throughout China's real estate landscape. <o:p></o:p>

With over $300 billion in debt, Evergrande's tight spot mirrors a broader trend of financial strain among major property developers. <o:p></o:p>

The ripple effects are obvious, with several prominent firms succumbing to the mounting pressure of debt obligations amidst tightening regulatory oversight. <o:p></o:p>

Official data paints a bleak picture, signalling a 9 per cent decline in property investment and a 30 per cent drop in new construction starts, amplifying concerns about the sector's stability.<o:p></o:p>

Navigating debt dynamics<o:p></o:p>

The twisted nature of China's real estate market poses formidable challenges for stakeholders grappling with debt dynamics.<o:p></o:p>

With billions in debt obligations looming ominously, developers find themselves at a crisis, navigating the balance between solvency and financial ruin. <o:p></o:p>

The spectre of default looms large, casting a shadow of uncertainty over investors, creditors, and the broader economy. <o:p></o:p>

Against this backdrop, regulatory authorities face mounting pressure to restore market confidence and accountability.<o:p></o:p>

China's real estate giant, Evergrande, and its founder, Hui Ka Yan, are ensnared in a $78 billion fraud scandal. According to reports, the allegations, accusing Evergrande of inflating revenues over two years, have prompted swift regulatory action, with the China Securities Regulatory Commission (CSRC), slapping Evergrande's mainland entity, Hengda Real Estate, with a record $583.

China's real estate giant, Evergrande, and its founder, Hui Ka Yan, are ensnared in a $78 billion fraud scandal. According to reports, the allegations, accusing Evergrande of inflating revenues over two years, have prompted swift regulatory action, with the China Securities Regulatory Commission (CSRC), slapping Evergrande's mainland entity, Hengda Real Estate, with a record $583.5 million fine. Moreover, Hui Ka Yan faces a lifetime ban from China's financial markets, marking a precipitous fall from grace for the once-revered magnate. Accusations and penalties The CSRC's punitive measures stem from allegations of financial misconduct orchestrated by Hui Ka Yan. The regulatory body contends that Hui directed Hengda Real Estate to "falsely inflate" its annual results in 2019 and 2020, artificially burnishing the company's financial health. This misconduct has not gone unpunished; Hui Ka Yan, once lauded as China's wealthiest individual, now faces a $6.5 million fine, alongside the discredit of a lifetime ban. Evergrande's chairman, under heightened scrutiny since September 2023, faces mounting legal woes as investigations into suspected "illegal crimes" continue to unfold. Despite mounting pressure, Evergrande remains silent, declining to address inquiries from media outlets seeking clarity on the unfolding scandal. Legal troubles and financial strain Evergrande's legal complexities have only compounded its financial woes, culminating in a court-ordered liquidation in Hong Kong earlier this year. This directive has cast a shadow over the company's once-stellar reputation, representative of China's property boom. The specter of Evergrande's downfall looms large, indicating broader structural challenges within China's real estate sector. Hui Ka Yan's abrupt descent from the pinnacle of corporate success to the depths of regulatory scrutiny highlights the gravity of the situation. Financial repercussions and market turbulence The after effects of Evergrande's scandal extend far beyond the confines of the company's boardroom, echoing throughout China's real estate landscape. With over $300 billion in debt, Evergrande's tight spot mirrors a broader trend of financial strain among major property developers. The ripple effects are obvious, with several prominent firms succumbing to the mounting pressure of debt obligations amidst tightening regulatory oversight. Official data paints a bleak picture, signalling a 9 per cent decline in property investment and a 30 per cent drop in new construction starts, amplifying concerns about the sector's stability. Navigating debt dynamics The twisted nature of China's real estate market poses formidable challenges for stakeholders grappling with debt dynamics. With billions in debt obligations looming ominously, developers find themselves at a crisis, navigating the balance between solvency and financial ruin. The spectre of default looms large, casting a shadow of uncertainty over investors, creditors, and the broader economy. Against this backdrop, regulatory authorities face mounting pressure to restore market confidence and accountability.

Evergrande’s Scandal: China's property giant accused of $78 bn fraud

China's economic czar urged local authorities to implement the policies laid out by national legislators to ease the country's real estate market slump. China's elite cities have recently eased market restrictions as a result of the protracted real estate slump. The real estate recession has negatively impacted both local governments' income streams and the country's economic recovery.

Real estate weighs heavily on China's growth

A Hong Kong court on Monday (Jan 29) issued an order for the liquidation of debt-ridden Chinese real estate giant Evergrande - once touted too big to fail. The verdict was delivered after the lawyers representing Evergrande failed to convince the judge that the company had a working restructuring plan.&nbsp;

Judge Linda Chan called for the liquidation of the company saying "enough is enough" due to the "obvious lack of progress on the part of the company" to furnish a viable rescue plan.&nbsp;

"I consider that it is appropriate for the court to make a winding-up order against the company and I so order," Chan said.

The decision by Judge Chan is likely to send ripples across China's finance market as Evergrande's ultimate demise comes two years after it defaulted.&nbsp;

Regarded by many domain experts as the poster child of China's real estate crisis, Evergrande has accumulated $325 billion in liabilities. After the announcement, its shares fell by more than 20 per cent in Hong Kong.&nbsp;

<a href="https://www.wionews.com/videos/evergrande-crisis-deepens-chairman-under-surveillance-640864">Watch |&nbsp;Evergrande crisis deepens: Chairman under surveillance</a>

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<h2>What is liquidation?&nbsp;</h2>

Liquidation is a process under which a company that has defaulted and is unable to operate further has its assets seized and sold off to generate cash.&nbsp;

The cash generated is then used to pay off creditors, or anyone the company owes money. However, in the case of Evergrande, it remains to be seen if the liquidation process will be followed by the Chinese government,&nbsp;

<h2>What happened to China's real estate market?&nbsp;</h2>

The once-booming property market of China now wears a desolated and dilapidated look. The builders are not willing to take on new projects while the ones underway have been halted, leading to a precarious situation.&nbsp;

For decades, the country's&nbsp;economy relied on the housing sector fuelled by population growth. However, after China's population growth stalled, the strict COVID-19 regulations took force and President Xi Jinping announced a crackdown on&nbsp;risky practices in the industry, the housing sector nearly collapsed.&nbsp;&nbsp;

<a href="https://www.wionews.com/business-economy/from-free-wives-to-insolvency-decoding-chinas-real-estate-turmoil-683134">Also read |&nbsp;From free wives to insolvency: Decoding China's real estate turmoil</a>

A combination of the aforementioned reasons has&nbsp;left&nbsp;real estate developers with enormous debt and more new, unfinished housing units than buyers.&nbsp;

Home buyers are being forced to live in unfinished and 'rotting' apartments. The living conditions are harsh, with even basic amenities missing.

While some are living in the flats braving bad conditions, others are forced to live on rent in the same city. In addition to the mortgage of the flat, the burden of rent is breaking the back of many, further pushing the Chinese economy into a spiral.&nbsp;&nbsp;

(With inputs from agencies)

A Hong Kong court on Monday (Jan 29) issued an order for the liquidation of debt-ridden Chinese real estate giant Evergrande - once touted too big to fail. The verdict was delivered after the lawyers representing Evergrande failed to convince the judge that the company had a working restructuring plan.

A Hong Kong court on Monday (Jan 29) issued an order for the liquidation of debt-ridden Chinese real estate giant Evergrande - once touted too big to fail. The verdict was delivered after the lawyers representing Evergrande failed to convince the judge that the company had a working restructuring plan. Judge Linda Chan called for the liquidation of the company saying "enough is enough" due to the "obvious lack of progress on the part of the company" to furnish a viable rescue plan. "I consider that it is appropriate for the court to make a winding-up order against the company and I so order," Chan said. The decision by Judge Chan is likely to send ripples across China's finance market as Evergrande's ultimate demise comes two years after it defaulted. Regarded by many domain experts as the poster child of China's real estate crisis, Evergrande has accumulated $325 billion in liabilities. After the announcement, its shares fell by more than 20 per cent in Hong Kong. Watch | Evergrande crisis deepens: Chairman under surveillance × What is liquidation? Liquidation is a process under which a company that has defaulted and is unable to operate further has its assets seized and sold off to generate cash. The cash generated is then used to pay off creditors, or anyone the company owes money. However, in the case of Evergrande, it remains to be seen if the liquidation process will be followed by the Chinese government, What happened to China's real estate market? The once-booming property market of China now wears a desolated and dilapidated look. The builders are not willing to take on new projects while the ones underway have been halted, leading to a precarious situation. For decades, the country's economy relied on the housing sector fuelled by population growth. However, after China's population growth stalled, the strict COVID-19 regulations took force and President Xi Jinping announced a crackdown on risky practices in the industry, the housing sector nearly collapsed. Also read | From free wives to insolvency: Decoding China's real estate turmoil A combination of the aforementioned reasons has left real estate developers with enormous debt and more new, unfinished housing units than buyers. Home buyers are being forced to live in unfinished and 'rotting' apartments. The living conditions are harsh, with even basic amenities missing. While some are living in the flats braving bad conditions, others are forced to live on rent in the same city. In addition to the mortgage of the flat, the burden of rent is breaking the back of many, further pushing the Chinese economy into a spiral. (With inputs from agencies)

Evergrande: Hong Kong court orders liquidation of debt-ridden Chinese real estate giant

China, once synonymous with rapid economic growth, is grappling with a profound real estate crisis that emerged with Evergrande's insolvency declaration two years ago. This event triggered a series of defaults and business losses, sending shockwaves through the nation's economy.

The aftershocks of Evergrande's collapse have reverberated across the Chinese economic landscape. Several multibillion-dollar companies have succumbed to the crisis, and key business executives have either been detained or vanished. The shadow banking industry, a cornerstone of China's real estate boom, faces insolvency. Zhongzhi Enterprise Group has revealed itself as "severely insolvent" with $64 billion in liabilities. These developments have created a ripple effect, with existing home prices in China's four wealthiest cities plummeting between 11% and 14%, and sales of new homes witnessing a 6% decline.

Unorthodox marketing strategies unveiled

Desperation has driven Chinese property developers to embrace unconventional and, at times, bizarre marketing tactics. One notable instance involves a Tianjin-based company's audacious offer – "buy a house, get a wife for free." Despite being a play on a traditional Chinese expression, this promotion incurred a $4,184 fine from regulators. Meanwhile, a company in Zhejiang province promised gold bars as an incentive for potential homebuyers. These attention-grabbing strategies underscore the lengths developers are willing to go to attract buyers amid a real estate downturn.

Economic ramifications and future outlook

Beyond the spectacle of unusual promotions lies the stark reality of China's evolving economic landscape. The nation's economy, which once boasted double-digit growth a decade ago, grew by a modest 5.2% in the fourth quarter, falling below economists' expectations. The transition from a property-dependent economy to one reliant on the manufacturing and service sectors is underway, a shift not without its challenges. The question that looms large is when this transition will reach its fruition. Former head of the statistics department at the People’s Bank of China, Sheng Songcheng, predicts a two-year downturn, setting the stage for a prolonged period of economic recalibration.

China, once synonymous with rapid economic growth, is grappling with a profound real estate crisis that emerged with Evergrande's insolvency declaration two years ago.

China, once synonymous with rapid economic growth, is grappling with a profound real estate crisis that emerged with Evergrande's insolvency declaration two years ago. This event triggered a series of defaults and business losses, sending shockwaves through the nation's economy. The aftershocks of Evergrande's collapse have reverberated across the Chinese economic landscape. Several multibillion-dollar companies have succumbed to the crisis, and key business executives have either been detained or vanished. The shadow banking industry, a cornerstone of China's real estate boom, faces insolvency. Zhongzhi Enterprise Group has revealed itself as "severely insolvent" with $64 billion in liabilities. These developments have created a ripple effect, with existing home prices in China's four wealthiest cities plummeting between 11% and 14%, and sales of new homes witnessing a 6% decline. Unorthodox marketing strategies unveiled Desperation has driven Chinese property developers to embrace unconventional and, at times, bizarre marketing tactics. One notable instance involves a Tianjin-based company's audacious offer – "buy a house, get a wife for free." Despite being a play on a traditional Chinese expression, this promotion incurred a $4,184 fine from regulators. Meanwhile, a company in Zhejiang province promised gold bars as an incentive for potential homebuyers. These attention-grabbing strategies underscore the lengths developers are willing to go to attract buyers amid a real estate downturn. Economic ramifications and future outlook Beyond the spectacle of unusual promotions lies the stark reality of China's evolving economic landscape. The nation's economy, which once boasted double-digit growth a decade ago, grew by a modest 5.2% in the fourth quarter, falling below economists' expectations. The transition from a property-dependent economy to one reliant on the manufacturing and service sectors is underway, a shift not without its challenges. The question that looms large is when this transition will reach its fruition. Former head of the statistics department at the People’s Bank of China, Sheng Songcheng, predicts a two-year downturn, setting the stage for a prolonged period of economic recalibration.

From free wives to insolvency: Decoding China's real estate turmoil

According to a recent research by the Japan Center for Economic Research, China's objective of doubling its gross domestic product by 2035 is in jeopardy if the country's real estate bubble explodes and causes a financial crisis. The country's economic growth would be stuck at about 1%.

Goal of expanding GDP to be threatened by China's real estate crash

The second-largest economy in the world is having difficulty picking up steam following years of covid-19 lockdowns. Apart from china's real estate meltdown battering middle-class wealth, there's also the growing threat of unemployment.

China's real estate crisis is battering middle-class wealth

China's real estate woes: Hit to middle-class households

Amid an ongoing real estate crisis, a privately run aluminium producer in Guangdong, China's manufacturing hub, has thrust the challenges faced by private businesses into the spotlight. Golden World Innovation Aluminium, overwhelmed by the economic headwinds, has suspended production, compelling its staff to take five months of leave with reduced salaries, the South China Morning Post reported.<o:p></o:p>

Unemployment pressures mount despite official figures<o:p></o:p>

China's economy showed few positive signs in 2023, defying support measures and putting significant pressure on employment. Official unemployment figures remain within the government target of 5.5 per cent, but signs of companies implementing unpaid leave or reductions indicate underlying challenges. Analysts call for more policy support to revive domestic demand and stabilise manufacturing production. The Foshan government's labour market report in November pointed to hefty pressure on manufacturing industries due to economic headwinds.<o:p></o:p>

Private sector struggles impact China's economic growth<o:p></o:p>

The private sector, historically the backbone of China's economic growth, is yet to fully recover. Fixed-asset investment in the private sector contracted by 0.5 per cent in the first 11 months of the year, in contrast to a rise of 6.5 per cent in the state sector. <o:p></o:p>

Golden World Innovation Aluminium, once thriving during the property sector's heyday, is now grappling with declining orders amid the real estate crisis. The slump has become a major drag on the economy, affecting various sectors.<o:p></o:p>

Real estate crisis hits multiple sectors<o:p></o:p>

The slump in the real estate market has had a cascading effect on industries beyond aluminium production. Yaxin Iron and Steel Group in Henan announced a suspension of production, and Raymond Zheng, owner of a piling company, placed most of his staff on unpaid leave. <o:p></o:p>

The funding chain in various industries is broken, leading to solvency problems and compromising the quality of construction projects. Despite these widespread issues, China is still on track to meet its growth target for the year.<o:p></o:p>

Challenges persist despite economic growth pledges<o:p></o:p>

China's top leadership, at the central economic work conference, emphasised development as the top political priority and pledged efforts to consolidate economic growth. However, challenges such as high youth unemployment, weak business expectations, a drop in exports, a bleak manufacturing sector recovery, and rising local government debts loom large.<o:p></o:p>

According to the South China Morning Post, Peng Peng, the executive chairman of the Guangdong Society of Reform, urged increased supportive policies to address the severity of the economic situation.<o:p></o:p>

Wide-ranging impact on various sectors<o:p></o:p>

The economic slowdown is not confined to specific industries; electronics, plastics producers, and the printing industry have also felt the pinch. Simatelex, a Hong Kong-based electronics producer, closed its Shenzhen factory after 38 years, affecting hundreds of workers. <o:p></o:p>

Plastics manufacturers Shenli and Forward, as well as Good Printing, have closed their Shenzhen factories, impacting thousands of jobs. The closures have not only economic ramifications but also affect nearby businesses relying on the workers.<o:p></o:p>

China struggles to replace real estate as economic pillar<o:p></o:p>

The challenge lies in finding emerging industries powerful enough to replace real estate as a pillar for the national economy. Paris-based investment bank Natixis highlights this concern, emphasising that China has yet to identify industries capable of filling the void left by the real estate sector. <o:p></o:p>

The Guangzhou Institute of Greater Bay Area warns of investment conditions' deterioration and funding difficulties for private businesses in 2024 if confidence is not revived.<o:p></o:p>

Policy room available, but challenges loom<o:p></o:p>

While China maintains a growth target for the year, concerns persist about a protracted weakness in private investment. A report by the Guangzhou Institute of Greater Bay Area urges caution, stating that if confidence isn't revived, private entrepreneurs may continue to face challenges.<o:p></o:p>

&nbsp;Xu Qiyuan from the Chinese Academy of Social Sciences emphasised the need for additional gauges beyond the urban surveyed unemployment rate to better reflect the real job pressures.

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Amid an ongoing real estate crisis, a privately run aluminium producer in Guangdong, China's manufacturing hub, has thrust the challenges faced by private businesses into the spotlight.

Amid an ongoing real estate crisis, a privately run aluminium producer in Guangdong, China's manufacturing hub, has thrust the challenges faced by private businesses into the spotlight. Golden World Innovation Aluminium, overwhelmed by the economic headwinds, has suspended production, compelling its staff to take five months of leave with reduced salaries, the South China Morning Post reported. Unemployment pressures mount despite official figures China's economy showed few positive signs in 2023, defying support measures and putting significant pressure on employment. Official unemployment figures remain within the government target of 5.5 per cent, but signs of companies implementing unpaid leave or reductions indicate underlying challenges. Analysts call for more policy support to revive domestic demand and stabilise manufacturing production. The Foshan government's labour market report in November pointed to hefty pressure on manufacturing industries due to economic headwinds. Private sector struggles impact China's economic growth The private sector, historically the backbone of China's economic growth, is yet to fully recover. Fixed-asset investment in the private sector contracted by 0.5 per cent in the first 11 months of the year, in contrast to a rise of 6.5 per cent in the state sector. Golden World Innovation Aluminium, once thriving during the property sector's heyday, is now grappling with declining orders amid the real estate crisis. The slump has become a major drag on the economy, affecting various sectors. Real estate crisis hits multiple sectors The slump in the real estate market has had a cascading effect on industries beyond aluminium production. Yaxin Iron and Steel Group in Henan announced a suspension of production, and Raymond Zheng, owner of a piling company, placed most of his staff on unpaid leave. The funding chain in various industries is broken, leading to solvency problems and compromising the quality of construction projects. Despite these widespread issues, China is still on track to meet its growth target for the year. Challenges persist despite economic growth pledges China's top leadership, at the central economic work conference, emphasised development as the top political priority and pledged efforts to consolidate economic growth. However, challenges such as high youth unemployment, weak business expectations, a drop in exports, a bleak manufacturing sector recovery, and rising local government debts loom large. According to the South China Morning Post, Peng Peng, the executive chairman of the Guangdong Society of Reform, urged increased supportive policies to address the severity of the economic situation. Wide-ranging impact on various sectors The economic slowdown is not confined to specific industries; electronics, plastics producers, and the printing industry have also felt the pinch. Simatelex, a Hong Kong-based electronics producer, closed its Shenzhen factory after 38 years, affecting hundreds of workers. Plastics manufacturers Shenli and Forward, as well as Good Printing, have closed their Shenzhen factories, impacting thousands of jobs. The closures have not only economic ramifications but also affect nearby businesses relying on the workers. China struggles to replace real estate as economic pillar The challenge lies in finding emerging industries powerful enough to replace real estate as a pillar for the national economy. Paris-based investment bank Natixis highlights this concern, emphasising that China has yet to identify industries capable of filling the void left by the real estate sector. The Guangzhou Institute of Greater Bay Area warns of investment conditions' deterioration and funding difficulties for private businesses in 2024 if confidence is not revived. Policy room available, but challenges loom While China maintains a growth target for the year, concerns persist about a protracted weakness in private investment. A report by the Guangzhou Institute of Greater Bay Area urges caution, stating that if confidence isn't revived, private entrepreneurs may continue to face challenges. Xu Qiyuan from the Chinese Academy of Social Sciences emphasised the need for additional gauges beyond the urban surveyed unemployment rate to better reflect the real job pressures. WATCH WION LIVE HERE

China's economic woes deepen as private sector struggles with challenges surrounding unemployment

China is contemplating injecting at least 1 trillion yuan ($137 billion) into its urban village renovation and affordable housing programs, in a bid to revive its struggling property market, Bloomberg reported on Tuesday, citing sources familiar with the matter.&nbsp;

The People's Bank of China plans to channel these funds through policy banks, with the aim of supporting households in their pursuit of home purchases. The move, spearheaded by Vice Premier He Lifeng, signals a vigorous attempt to counter the profound slump in the property sector, a downturn that has significantly impacted economic growth and consumer confidence.&nbsp;

The proposed initiative involves leveraging financial tools such as the Pledged Supplemental Lending (PSL) and special loans. If implemented, this program could mark a pivotal step in the government's comprehensive strategy to stabilise the housing market, considered the most severe downturn in decades. &nbsp;

Market concerns have surged regarding the financial health of China's prominent developers, particularly after a series of record defaults within the industry. The injection of funds aims not only to rejuvenate the property market but also to foster a more balanced and sustainable development trajectory for the long term. &nbsp;

The PSL program, sometimes dubbed as "helicopter money," allows the central bank to provide low-cost funds to developers engaged in tenement renovation projects. This involves developers using the funds to acquire land from local governments, which then offer cash subsidies to households affected by demolitions, spurring demand for newly-built or existing apartments. &nbsp;

Analysts believe that the funding could generate over 10 trillion yuan in overall direct investment, driving private investment in the sectors. According to Bloomberg, Bruce Pang, Chief Economist for Greater China at Jones Lang LaSalle Inc., emphasised, "This is not to spur growth but rather deliver a more balanced development for the longer term."&nbsp;

However, it is worth noting that the PSL program has a controversial history. Initially deployed in 2014 to counter a property market downturn, it faced criticism for contributing to a real estate bubble in lower-tier cities. The central bank reduced its provision of new PSL funds in 2019 as projects concluded. However, the program experienced a brief re-launch last year to aid policy banks, which prioritise public service over profit, in financing infrastructure development. &nbsp;

This latest plan follows Beijing's unconventional fiscal stimulus announced last month, including a budget deficit increase through the issuance of an additional 1 trillion yuan in sovereign bonds.&nbsp;

While economic data for the third quarter suggested a gradual recovery, official data anticipated to be released on Wednesday is expected to reveal a faltering economic momentum in October. &nbsp;

(With inputs from Bloomberg)&nbsp;

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China is contemplating injecting at least 1 trillion yuan ($137 billion) into its urban village renovation and affordable housing programs, in a bid to revive its struggling property market, Bloomberg reported on Tuesday, citing sources familiar with the matter.

China is contemplating injecting at least 1 trillion yuan ($137 billion) into its urban village renovation and affordable housing programs, in a bid to revive its struggling property market, Bloomberg reported on Tuesday, citing sources familiar with the matter. The People's Bank of China plans to channel these funds through policy banks, with the aim of supporting households in their pursuit of home purchases. The move, spearheaded by Vice Premier He Lifeng, signals a vigorous attempt to counter the profound slump in the property sector, a downturn that has significantly impacted economic growth and consumer confidence. The proposed initiative involves leveraging financial tools such as the Pledged Supplemental Lending (PSL) and special loans. If implemented, this program could mark a pivotal step in the government's comprehensive strategy to stabilise the housing market, considered the most severe downturn in decades. Market concerns have surged regarding the financial health of China's prominent developers, particularly after a series of record defaults within the industry. The injection of funds aims not only to rejuvenate the property market but also to foster a more balanced and sustainable development trajectory for the long term. The PSL program, sometimes dubbed as "helicopter money," allows the central bank to provide low-cost funds to developers engaged in tenement renovation projects. This involves developers using the funds to acquire land from local governments, which then offer cash subsidies to households affected by demolitions, spurring demand for newly-built or existing apartments. Analysts believe that the funding could generate over 10 trillion yuan in overall direct investment, driving private investment in the sectors. According to Bloomberg, Bruce Pang, Chief Economist for Greater China at Jones Lang LaSalle Inc., emphasised, "This is not to spur growth but rather deliver a more balanced development for the longer term." However, it is worth noting that the PSL program has a controversial history. Initially deployed in 2014 to counter a property market downturn, it faced criticism for contributing to a real estate bubble in lower-tier cities. The central bank reduced its provision of new PSL funds in 2019 as projects concluded. However, the program experienced a brief re-launch last year to aid policy banks, which prioritise public service over profit, in financing infrastructure development. This latest plan follows Beijing's unconventional fiscal stimulus announced last month, including a budget deficit increase through the issuance of an additional 1 trillion yuan in sovereign bonds. While economic data for the third quarter suggested a gradual recovery, official data anticipated to be released on Wednesday is expected to reveal a faltering economic momentum in October. (With inputs from Bloomberg) WATCH WION LIVE HERE

China unveils $137bn plan to revitalise property market amid economic challenges 

In a significant development, China Evergrande Group, one of the world's largest real estate developers, has asked a Hong Kong court five-week more weeks to develop a viable solution with its creditors. Facing the future threat of liquidation, the company has announced a revised debt restructuring plan. &nbsp;

The court adjourned the hearing to December 4, the date is now a critical deadline for Evergrande to present an actionable restructuring proposal. Failure to do so could prompt the court to proceed with liquidation. Justice Linda Chan spoke of the requirement for a "concrete" plan, emphasising the potential for the company to face winding up should such a proposal not materialise by the specified date.&nbsp;

Evergrande's dilemma curbs from debt that exceeds $300 billion, leading to its default on offshore debt in late 2021, setting off a ripple effect within China's property sector. The situation worsened when the company's founder, Hui Ka Yan, faced a criminal investigation last month, interfering with a $23 billion offshore debt restructuring plan. &nbsp;

As a result of the inquiry into its flagship property unit, mainland regulators banned Evergrande from issuing new dollar bonds to stabilise its financial standing.&nbsp;

Sources reveal that Evergrande had started discussions with certain bondholders regarding a fresh restructuring proposal over the past fortnight. The revised plan supposedly results in enabling bondholders to convert their bonds into equity and bonds tied to two of its listed subsidiaries, Evergrande Property Services Group and Evergrande New Energy Vehicle Group. Notably, this new proposition no longer includes issuing new notes by China Evergrande.&nbsp;

However, the company's challenges are reflected in its stock performance, with shares plunging by 9.8 per cent on Monday. The vision of a liquidation process reveals Evergrande, which, despite its vast asset base of $240 billion as of June, could impact global markets if it emerges. Neil McDonald, representative of a major bondholder group, conveyed the urgency spoken by the court for a viable restructuring plan that aligns with creditors' interests.

(With inputs from Reuters)

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In a significant development, China Evergrande Group, one of the world's largest real estate developers, has asked a Hong Kong court five-week more weeks to develop a viable solution with its creditors.

In a significant development, China Evergrande Group, one of the world's largest real estate developers, has asked a Hong Kong court five-week more weeks to develop a viable solution with its creditors. Facing the future threat of liquidation, the company has announced a revised debt restructuring plan. The court adjourned the hearing to December 4, the date is now a critical deadline for Evergrande to present an actionable restructuring proposal. Failure to do so could prompt the court to proceed with liquidation. Justice Linda Chan spoke of the requirement for a "concrete" plan, emphasising the potential for the company to face winding up should such a proposal not materialise by the specified date. Evergrande's dilemma curbs from debt that exceeds $300 billion, leading to its default on offshore debt in late 2021, setting off a ripple effect within China's property sector. The situation worsened when the company's founder, Hui Ka Yan, faced a criminal investigation last month, interfering with a $23 billion offshore debt restructuring plan. As a result of the inquiry into its flagship property unit, mainland regulators banned Evergrande from issuing new dollar bonds to stabilise its financial standing. Sources reveal that Evergrande had started discussions with certain bondholders regarding a fresh restructuring proposal over the past fortnight. The revised plan supposedly results in enabling bondholders to convert their bonds into equity and bonds tied to two of its listed subsidiaries, Evergrande Property Services Group and Evergrande New Energy Vehicle Group. Notably, this new proposition no longer includes issuing new notes by China Evergrande. However, the company's challenges are reflected in its stock performance, with shares plunging by 9.8 per cent on Monday. The vision of a liquidation process reveals Evergrande, which, despite its vast asset base of $240 billion as of June, could impact global markets if it emerges. Neil McDonald, representative of a major bondholder group, conveyed the urgency spoken by the court for a viable restructuring plan that aligns with creditors' interests. (With inputs from Reuters) WATCH WION LIVE HERE

Evergrande gets a reprieve from court hearing as it seeks revised debt plan 

Property investment in China, a vital factor in the country's economic growth, has continued to decline. Home values in the country's largest cities have fallen at their quickest rate in over a year in September. That has dampened investors' enthusiasm about the third-quarter economic growth numbers.

Real estate downturn hits China's stocks

A group of investors protested outside the office of Zhongrong International Trust Co—one of China’s largest shadow banks—after it again failed to make payments on dozens of its products.

Zhongrong is the ninth largest trust in China, with 600 billion Chinese yuan, or $82 billion, worth of assets under management. It has been deferring its payments since late July.

According to Bloomberg, Zhongrong has missed payments on dozens of products and has no immediate plan to make clients whole payouts.

At least 30 products are now overdue, and Zhongrong also reportedly halted redemptions on some short-term instruments.

<h2>Deferred payments since July&nbsp;</h2>

On Wednesday (Aug 16), around two dozen protesters flocked to Zhongrong to demand payment. A video of the incident also went viral showing around 10 police and security officers deployed outside the office and attempting to pacify the agitated crowd.

In one of the clips, which was accessed by Bloomberg, a woman angrily asks about a product she owned that matured on July 28. “Why doesn’t the company pay us back?” she says. “It has already matured. Your financial statements said there is a profit.”

Another woman shouts,&nbsp;“Give us the money back, or we will die here.” A third says: “Why you don’t give us a clear explanation?”

The liquidity crisis troubling Zhongrong has sent alarm bells in Beijing as it comes just days after Country Garden, China's biggest private-sector developer by sales, missed interest payments on two US-dollar-denominated bonds.

<h2>China economy: Overall urban employment rises, economy in China signals sharper downturn</h2>

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<h2>Looming crisis&nbsp;</h2>

Both events are concerning as China's trust companies, once seen as a safe place for wealthy Chinese to park their money for hefty returns, are struggling to repay their clients.

These trust companies sell investment or trust products to corporate and wealthy clients. The clients' funds are then pooled and invested in a wide range of products or used as loans to private companies — including real-estate developers.

According to Bloomberg Economics, as of the end of 2022, China's trust sector's exposure to real estate was about 2.2 trillion yuan, or $302 billion, accounting for 10 per cent of its total assets.

Recently, a lot of trust firms have started defaulting on billions of dollars of investment products and the industry has shrunk by about 20 per cent from its peak in 2017, when regulators began clamping down on the nation’s shadow-banking excesses.&nbsp;

“The big danger is that a negative feedback loop kicks in, with property stress causing strains in the financial system, undermining credit expansion and depressing growth, which, in turn, exacerbates the slump in the property sector,” Bloomberg Economics said in a note.

(With inputs from agencies)

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A group of investors protested outside the office of Zhongrong International Trust Co—one of China’s largest shadow banks—after it again failed to make payments on dozens of its products.

A group of investors protested outside the office of Zhongrong International Trust Co—one of China’s largest shadow banks—after it again failed to make payments on dozens of its products. Zhongrong is the ninth largest trust in China, with 600 billion Chinese yuan, or $82 billion, worth of assets under management. It has been deferring its payments since late July. According to Bloomberg, Zhongrong has missed payments on dozens of products and has no immediate plan to make clients whole payouts. At least 30 products are now overdue, and Zhongrong also reportedly halted redemptions on some short-term instruments. Deferred payments since July On Wednesday (Aug 16), around two dozen protesters flocked to Zhongrong to demand payment. A video of the incident also went viral showing around 10 police and security officers deployed outside the office and attempting to pacify the agitated crowd. In one of the clips, which was accessed by Bloomberg, a woman angrily asks about a product she owned that matured on July 28. “Why doesn’t the company pay us back?” she says. “It has already matured. Your financial statements said there is a profit.” Another woman shouts, “Give us the money back, or we will die here.” A third says: “Why you don’t give us a clear explanation?” The liquidity crisis troubling Zhongrong has sent alarm bells in Beijing as it comes just days after Country Garden, China's biggest private-sector developer by sales, missed interest payments on two US-dollar-denominated bonds. China economy: Overall urban employment rises, economy in China signals sharper downturn Looming crisis Both events are concerning as China's trust companies, once seen as a safe place for wealthy Chinese to park their money for hefty returns, are struggling to repay their clients. These trust companies sell investment or trust products to corporate and wealthy clients. The clients' funds are then pooled and invested in a wide range of products or used as loans to private companies — including real-estate developers. According to Bloomberg Economics, as of the end of 2022, China's trust sector's exposure to real estate was about 2.2 trillion yuan, or $302 billion, accounting for 10 per cent of its total assets. Recently, a lot of trust firms have started defaulting on billions of dollars of investment products and the industry has shrunk by about 20 per cent from its peak in 2017, when regulators began clamping down on the nation’s shadow-banking excesses. “The big danger is that a negative feedback loop kicks in, with property stress causing strains in the financial system, undermining credit expansion and depressing growth, which, in turn, exacerbates the slump in the property sector,” Bloomberg Economics said in a note. (With inputs from agencies) WATCH WION LIVE HERE

Dozens of investors protest as China's shadow bank misses payments, signals deep distress in economy

Whether you are from Luxemburg or Zimbabwe owning a house - maybe the ultimate dream - the ownership pride is probably higher in China than anywhere else in the world.

Great Wall of Doubt: China's Real Estate sector on shaky ground