Financial troubles at Country Garden, one of China’s major real estate giants, have caused panic in the markets and sparked anger among online commentators. The company, which was once regarded as the gold standard in China’s housing market, has hinted at its financial difficulties for weeks. However, it recently made it clear that it expects a loss of up to $7.6 billion in the first six months of this year.
The news sent Country Garden’s shares on a downward spiral, dragging the company’s value to new lows. The stock is currently trading around one Hong Kong dollar, or approximately 13 cents US. This pessimism was not limited to the markets, as social media users in China expressed shock and frustration at the continuous bad news regarding the country’s housing market.
The collapse of another real estate giant, China Evergrande, two years ago is still fresh in people’s memories, and many are now wondering if Country Garden will be the next to fall. For years, Chinese property developers took on large amounts of debt to expand their presence in cities across the country. They often sold apartments before they were completed, leading to a wave of collapses in the industry.
People have been questioning where the money went that home buyers gave to these developers, as there are still numerous unfinished apartments. The fate of Country Garden, once considered a more responsible player, has fueled public anger toward China’s housing sector. This frustration highlights the deep-rooted systemic problems in the industry and raises concerns about China’s policymakers losing control.
Economists and market watchers are alarmed by the potential collapse of Country Garden and fear that even with efforts to support the housing market, China’s policymakers may be unable to prevent further issues. It remains to be seen which companies can weather the storm in this severe winter for the real estate industry.
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