Evergrande Delisted After Collapse

a { color: #880000 !important; background: #ffeeee !important; } Latest News from NourishThe Nourish Mission (formerly OneSub)Get answers to today's big questionsEvergrande Delisted After Collapsemarkets > economyEvergrande, once China's largest property developer valued at over $50 billion, has been delisted from the Hong Kong stock exchange after failing to resume trading for 18 months. Its collapse, triggered by massive debt and regulatory crackdowns, highlights ongoing challenges in China's property sector and economy.

What's happened

Evergrande, once China's largest property developer valued at over $50 billion, has been delisted from the Hong Kong stock exchange after failing to resume trading for 18 months. Its collapse, triggered by massive debt and regulatory crackdowns, highlights ongoing challenges in China's property sector and economy.

What's behind the headline?

Evergrande's collapse exemplifies the risks of China's debt-fueled property boom. The company's failure to meet debt obligations and the subsequent delisting reflect the broader systemic issues within China's real estate market. The government's 'three red lines' policy aimed to curb excessive borrowing but has inadvertently deepened the downturn, leaving thousands of unfinished projects and dampening consumer confidence. The liquidation process, including lawsuits against auditors like PwC China, underscores the lack of transparency and the scale of financial misconduct. Moving forward, China's property sector will likely remain subdued for years, with authorities attempting to stabilize the market through measures such as easing restrictions and supporting affordable housing. The broader economic impact includes slowed growth, reduced consumer spending, and ongoing financial instability, which will influence global markets and investor confidence.

What the papers say

The Independent's coverage emphasizes the systemic risks and regulatory environment that led to Evergrande's downfall, highlighting the company's massive debt and regulatory crackdowns. The Guardian provides a detailed account of the company's delisting and the broader economic implications, focusing on the decline from a peak valuation of over HK$400bn to a market value of just HK$2bn. AP News echoes these points, stressing the ongoing efforts to wind up debts exceeding $340 billion and the impact on China's property market, which has been a significant drag on the country's economic growth. All sources agree that Evergrande's collapse is a pivotal event illustrating the vulnerabilities in China's real estate sector and the challenges faced by regulators and investors alike.

How we got here

Evergrande's rise began in the 1990s amid China's urbanization and economic reforms, leading to rapid expansion fueled by over $300 billion in borrowing. Its 2009 Hong Kong listing marked a peak, but regulatory limits introduced in 2020, along with Beijing's debt controls, precipitated its downfall. The company defaulted on offshore bonds in 2021, and efforts to restructure failed, culminating in liquidation and delisting in 2024. The crisis has significantly impacted China's economy, especially the property sector, which accounts for about a third of GDP and local government revenue.

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