It was considered the gold standard in China's increasingly volatile real estate market. Investors now see the giant country garden developer as a ticking time bomb.
The latest major Chinese real estate giant to avoid failure has signaled its financial woes for weeks. On Thursday night, Country Garden said it expects to lose up to $7.6 billion in the first six months of this year.
Shares of the Hong Kong-traded company fell on Friday, pushing prices to new lows. Shares trade at about 1 Hong Kong dollar, or about 13 US cents
The depression was not limited to the market.
Commentators on Chinese social media expressed shock — and outrage — at the frequency of bad news about the Chinese real estate market. Many pointed to another property giant, China Evergrande, which collapsed two years ago, sending a wave of fire through the property sector.
"Another real estate giant is about to fall," author and former journalist Guo Guosong wrote in a commentary. "Evergrande has collapsed. Is Country Garden next?
Others rallied and by midday online discussions had begun, with more than 100 million people following the comments using the hashtag "Insolvent Evergrande".
For years, Chinese real estate developers have borrowed heavily to expand into the country's cities, selling apartments before they're finished. Over time, their top executives joined the ranks of Asia's richest tycoons. Evergrande's failure in 2021 has cast a spotlight on industry practices, triggering a cascade of similar housing crises, leaving millions of uncompleted homes.
"These real estate tycoons make a lot of money, but the business is a mess, the money goes into their pockets and the mess belongs to the government," wrote Sun Guiyu, whose verified social media account says he is a company president. in the name of Shenzhen Neteye Holdings.
"Ordinary people pay for systemic problems," he added.
Public anger against China's housing sector has been building for years and has sometimes spilled onto the streets. But the fortunes of Country Garden, one of the country's last giants and a company seen as a more responsible player, proved a source of frustration on Friday. Some wonder: What happened to the money buyers paid developers when so few homes were built?
The country garden's brink of collapse has worried economists and market watchers, who fear Chinese politicians have lost control of the property market despite promises to support it. Some commented in an online chat on Friday.
"A harsh winter has arrived in the real estate sector," wrote An Guanglu, a writer from Shaanxi Province.
"Let's see who survives.
you Contributed to research.
