China’s Country Garden Real Estate Group Faces Massive Loss, Sending Shockwaves through Stock Markets

2023-08-15 18:17:00

This colossal loss is due to the difficulties encountered by the Chinese real estate group, Country Garden, of which it is the majority shareholder. Difficulties that have caused the stock market to fall.

One of China’s biggest real estate developers crashes on the stock market, caught up in the crisis

The action, listed on the Hong Kong Stock Exchange has been under pressure for months like a Chinese real estate sector in crisis. Monday’s session was particularly bad, being marked by an 18% fall in the price caused by uncertainties over the repayment of Country Garden’s debt valued at 150 billion euros. These uncertainties have also weighed on global stock markets.

Born in 1981 in the district of Shunde, Yang Huiyan will urgently have to find a solution to reassure the markets which fear a payment default and, in turn, a contagion effect on the Chinese economy. Holder of a degree in “Marketing and Logistics” at Ohio State University, in the United States, Yang Huiyan was the personal assistant of her father Yang Guoqiang, who founded Country Garden in 1997. She inherited the latter’s fortune when he transferred his shares to her in 2005, according to official Chinese media.

She became the richest woman in Asia two years later following the IPO of the promoter – one of the largest in the country – in Hong Kong. An entry into the markets which had made it possible to raise 65 billion dollars.

The setbacks of Country Garden and other real estate developers hurt by astronomical over-indebtedness darken the outlook for the Chinese economy. To support growth, which is also suffering from sluggish confidence, the Chinese central bank on Tuesday lowered a reference rate for medium-term loans, a measure that reduces the cost of financing for commercial banks to encourage them to grant more loans and on more favorable terms. “This drop will have a limited effect”, warns analyst Ting Lu, of Nomura bank, however, arguing that for the Chinese economy, the “worst is yet to come”.

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