Country Garden Stalled Progress: The busy northern Chinese metropolis of Tianjin is facing a terrifying scene. Country Garden (2007.HK), a waterfront housing complex, is in various phases of construction. The once-busy building site now has few workers wandering across the field.
Since they haven’t been paid since Chinese New Year, many workers are worried about money. Wang, an experienced worker with over 50 years, says, “We’re all concerned here.” His recent job loss is part of a worse economy.
two famous Country Gardens in Tianjin, a major port city near Beijing. Activity has decreased or stopped in both sites. People once thought idle cranes were development. They have been replaced with high-rise apartment structures under construction. Workers in the dorms are growing louder every day since they haven’t been paid. Because the rooms are close.
Wei, another worker, expressed his concerns, “The pressure is increasing.” He shares the dread of most people his age and prioritizes his family’s necessities while receiving a 4,500 yuan stipend, or $618.
Country Garden, once admired for its financial prowess, now symbolizes the challenge facing Chinese developers. Country Garden was formerly a model business. This narrative reflects China’s real estate market’s slump, not just one enterprise. The weak real estate market and consumer expenditure are worsening this.
There is a slim possibility things may improve. A spokeswoman from one of Country Garden’s initiatives said registered personnel will be paid. Yunjing Huating construction has halted due to government issues. Still, activities should resume soon, and the goal is to finish by October 2024.
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Remember that not all Country Garden employees work directly for them. Some are engaged by the company’s contractor. Despite not being able to reach this subcontractor, they say pay returns will happen soon. The Ministry of Housing declined to comment on the company’s issues.
The Japanese bank Nomura projected that Country Garden has one million residences under construction after further research. Even though the organization is hiding its financial troubles, they have pledged to uphold its ideals.
The appeal of excellent homes in city-like regions and fast sales made Country Garden successful. These kept the company together. Despite numerous successful Country Garden projects, Centaline Property Agency Tianjin financial advisor Gao Fei says the industry is slowing down. Tianjin Centaline Property Agency employs Gao Fei. Gao’s data suggests sales declines slow construction.
Due to money issues and COVID-19 regulations, Chinese owners have challenged pre-sold house projects, which is reflected in the housing market. After a brief increase in 2023, the property market is showing symptoms of slowing recovery. Gao summarizes the widespread belief that “Many people who want to buy a home are limited by their finances, which affects their buying decisions.” Unfortunately, this predicament is part of a bigger trend of economic growth and challenges. This pattern has persisted for some time.
Our Reader’s Queries
Does China store 70% of its wealth in real estate?
In China, private ownership of housing is prevalent and contributes to around 25 percent of the country’s GDP. It is also the primary source of household wealth, estimated at almost 70 percent.
What do I need to know about China’s real estate crisis?
China’s real estate crisis is causing a significant decline in family wealth, as 70% of family assets are tied up in property. The impact is widespread, with every 5% drop in home prices resulting in a loss of 19 trillion yuan ($2.7 trillion) in housing wealth, according to Bloomberg Economics. This trend is alarming and requires immediate attention to prevent further damage to the economy.
Why did Country Garden default?
Amid a liquidity crisis, Country Garden, once China’s largest homebuilder, has failed to make a payment on a $500 million bond. The company had previously cautioned investors that it may default on its offshore debt, following a significant drop in sales reported last month.
Is China’s property crisis upending tens of thousands of lives?
The property crisis in China is causing immense upheaval for tens of thousands of people. One of the country’s biggest developers is on the brink of default, which is exacerbating the difficulties faced by homebuyers, workers, and investors who are already struggling. This comes at a time when the economy desperately needs a boost, making the situation even more dire.