PeterRS Posted September 6, 2023 Posted September 6, 2023 The desperate state of Chinese property developers was outlined in the following forum last month. Having taken over as China's No. 1 property developer company from massively indebted Evergrande, Country Garden has been warning of its own disastrous financial position. At the end of last month it issued a warning to the Hong Kong Stock Exchange that its first half year loss was close to US$6.72 billion. It has also defaulted on overseas loans and is likely to be booted off the HKSE. In Malaysia,some of its woes are there for all to see. Its massive residential development outside Johor Bharu and close to Singapore was launched under China's Belt and Road initiative. The ambitious aim of Forest City was to provide housing for 700,000 residents. Many were expected to be purchased by Chinese from the mainland seeking to park their savings offshore. One such investor was 29-year old Zhao Bojian from Henan province who purchased one of the existing 26,000 apartments prior to completion 5 years ago. He is one of only 9,000 residents. Most of these, though, do not actually live there. Despite the Malaysian government being desperate to encourage local buyers, especially from neighbouring SIngapore, few have done so. To attract more overseas buyers, a special economic zone has been developed with duty free shops, a special income tax rate and multiple entry visas. Llittle has worked. With China's economy now in a very bad state, the flood of Chinese buyers has evaporated. Consequently, much of the overall development is incomplete. There are no streetlights, for example. Worse, the 4-lane access road has collapsed forcing drivers to take a longer detour. Country Garden is now saddled with debts of almost US$200 billion. Its ability to continue with Forest City is unlikely. Virtually a ghost town, Forest City is destined to become an enormous whilte elephant. Photo: AFP https://www.straitstimes.com/asia/se-asia/malaysias-forest-city-teeters-over-china-property-giant-woes tm_nyc 1 Quote
