China’s “shock therapy”

CHINA ADVISORY - Report 12 Oct 2023 by Andrew Collier

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China’s two largest property developers this week have said they are on the verge of default. China Evergrande faced a government cancellation of its restructuring plan for $19 billion of international bonds that investors say could lead to a collapse of the company. Meanwhile, Country Garden has hired outside advisors to restructure its debt, which many have interpreted as a prelude to an outright default. I view Beijing’s response as a form of “shock therapy.”