After Evergrande’s liquidation, he warned that the Chinese real estate crisis “has not reached the bottom”.

The problems of the Chinese real estate sector were highlighted on Monday, when a hong kong court ordered the giant China Evergrande to cease its operations and liquidate the companyWhich has a debt of more than 300,000 million dollars.

Evergrande is The latest Chinese real estate company to collapse under huge debt burden New home sales continue to decline,

The contraction of the sector, already the longest on record, is not only getting longer, but also accelerating. A hard blow to China, as real estate represents almost a quarter of the Chinese economy,

Home sales in China in 2023 fell 6.5%, Sales in December alone fell 17.1% from a year earlier, according to data from Dongxing Securities, a Chinese investment bank. new York Times, Investment in new projects also slowed down. Real estate development declined by 9.6% last year.

“The market has not reached the bottom yet”They said new York Times Alicia Garcia-Herrero, chief economist for Asia-Pacific at Natixis. “There is still a long way to go.”

The crisis began when Beijing imposed a series of rules aimed at curbing excessive debt by developers. Since 2021, more than 50 Chinese real estate companies have defaulted on their loansWhich includes the two companies that once dominated the country’s real estate market: Evergrande and Country Garden.

This led to a sudden loss of confidence in the sector, the main store of wealth for many Chinese families, and it became a sector Growing problem for Chinese policy makersWho are making every possible effort to reactivate manufacturing and sales, but are getting very little results.

In fact, Xi Jinping’s regime has reversed many of the restrictions imposed in 2020. Now, the financial regulator Banks are being urged to provide more loans to property developers.

Last week, xiao yuanqiThe deputy director of China’s National Financial Regulatory Administration said the country’s financial institutions had an “indispensable responsibility to provide strong support” to the real estate sector.

The official ordered banks not to immediately cut loans to distressed projects but instead find a way to support them by extending loan repayment periods or providing additional funds. Last week, Central bank And this financial regulator China said they would allow some developers to use bank loans for commercial properties to repay other loans or bonds.

But even the relaxation of rules did not help in lifting the market. Outstanding home loans in China fell 1.6 percent That compares to last year, 2022, a year in which companies and residents in many cities continued to deal with pandemic lockdowns. According to Chinese Economic Journal CaixinThis is the first decline in nearly two decades. By 2021, mortgages had increased by more than 10 percent annually.

Another persistent source of concern for some potential home buyers remains the large number of incomplete and already sold flats. Although the government has put pressure on companies to complete construction of already sold apartments, they There are many projects which have not been completed.

Cited in a research note this month NYT, larry huMacquarie Group’s chief China economist said The real estate collapse was “self-satisfaction”Because real estate developers’ debt problems kept buyers away and put pressure on home sales, while the lack of new business exacerbated these companies’ financial problems.

The expert said Chinese authorities could provide relief to real estate developers similar to how the US government intervened with the Troubled Asset Relief Program, or TARP, during the global financial crisis.

“What will we see in 2024 Will the central government intervene and take the main responsibility to stop the infection?Hu wrote.