Chinese real estate giant reveals staggering $81 billion loss amid slump
Chinese real estate developer Evergrande has disclosed losses of $81 billion over 2021 and 2022, underscoring how its massive debts remain a serious concern for the financial health of the Chinese property sector - and the world's second-largest economy overall.
China's post-pandemic recovery is threatened by the sluggish real estate sector, which is still responsible for a quarter of the economy's growth.
As one of China's largest builders of apartments, Evergrande slid rapidly into financial distress in late 2021, causing alarm around the world as some analysts feared a collapse that could be China's "Lehman moment" - and the start of another financial crisis.
Instead off letting the company implode under a $300 billion pile of debt, Chinese authorities opted for what analysts called a "controlled demolition" - essentially managing the corporation through a gradual collapse. Since then, the company has continued to limp on, posing a continual headache for the policymakers who are trying to restore confidence in the real estate sector.
The group finally came clean about the extent of its near-fatal cash crunch and the slow progress it has made toward resolving its financial difficulties when it released a repeatedly delayed earnings report late on Monday local time.
Aside from the $81 billion in losses, Evergrande's total liabilities continued to grow in 2022, reaching $335 billion compared with just $251 billion in assets, according to the earnings statement.
That disclosure underscored the Chinese government's tricky effort to tackle real estate debt without bursting a possible property bubble, as it tries to ensure a tepid post-pandemic recovery doesn't get knocked off track by a worsening real estate slump.
The Chinese economy missed expectations to grow by 6.3...