How fall of property giant Evergrande sent a shockwave through China
The Guardian’s Helen Davidson and Martin Farrer write:
‘The potential collapse of Evergrande – the culmination of years of borrowing – has sent shockwaves through the finance and property sectors, and prompted concern that it could affect China’s entire financial system, even international markets. There are also concerns about how it will affect iron ore prices. On Thursday, the Fitch Ratings agency downgraded its forecast for China’s economic growth, saying the “main factor weighing on the outlook is the slowdown in the property sector”.’
‘All over China, dozens of high-rises continually spring up, spread across spaces the size of several football fields. The rush to build has caused numerous problems, including risky finances, poor construction – dramatically demonstrated in viral footage of the mass demolition of 15 high-rises in the city of Kunming – and huge oversupply. Analysts have estimated 90 million people could be housed in the empty properties.’
It sounds a similar story to the oversupply of the wrong kind of housing in Deptford and the rest of the UK. Will it have repercussions for developments such as Convoys Wharf, with its Hong Kong owner, here in this country? Or will they ride the storm?
From The Guardian 25 September 2021. Read the full article here.