November 10, 2021 04:33 GMT
Experts say the turmoil in China’s real estate sector threatens to overwhelm global finances.
Chinese real estate group Kaisa Group Holdings needs help paying its investors, workers and suppliers, the company itself admitted during a meeting with a group of government experts, banks and other companies in the Chinese sector. reach Reuters quoted a source familiar with the matter.
The meeting was held in Shenzhen on Monday, during which Kaisa, the country’s 25 largest real estate sales companies, urged state-owned enterprises to special help To improve liquidity through project acquisitions and strategic procurement.
The company regretted that some financial institutions had incorrectly withdrawn funds from its accounts and demanded claims asset freeze against you is dealt centrally in a court in Shenzhen, where the company is headquartered.
Kaisa also announced Monday on its WeChat account that it is in negotiations with investors in wealth management products about payment solutions and Ask for more time To solve your cash flow problems.
Meanwhile, the credit rating agency Fitch downgraded “rating” Kaisa on Tuesday noted deteriorating liquidity, undisclosed debt in wealth management products, and little progress in liquidating assets.
Kaisa is one of several companies in the sector experiencing a liquidity crunch in China after credit restrictions imposed by the country’s government and the debt crisis of the real estate giant. EvergrandeAnd he’s on the verge of defaulting with a debt worth more than 300 billion dollars.
On November 11, Evergrande will have to to make late payments His creditors are $148 million. Recently, it already defaulted on interest payments to some holders of international bonds that matured on November 6, but to avoid a “default”, it can go back to a 30-day extension.
Risks to global economic growth
Given the size of the debt and the cumulative effects of a possible default, the problems of the Chinese real estate sector threaten confuse This concerns not only the financial affairs of the Asian giant, but also global finances, as many experts warn.
Thus, the US Federal Reserve on Monday acknowledged that the situation creates risks for the North American country’s financial system.
“Given the size of China’s economy and financial system, financial stress in China could strain global financial markets by deteriorating sense of risk, increasing Risks to global economic growth The Central Bank announced in its latest financial stability report.