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— Financelot (@FinanceLancelot) August 17, 2023
Country Garden collapse sparks contagion fears as China economy tanks
China’s economy is tanking. Investors are running scared. Consumers are stashing their cash. And everybody’s afraid of what Chairman Xi Jinping’s next arbitrary reaction will be.
Country Garden – the country’s last surviving mega property developer – is in trouble.
Two years after the collapse of its competitor Evergrande, it failed to raise enough cash on Monday to meet scheduled bond repayments.
Only a 30-day grace period remains between solvency and default.
Now, fears of economic “contagion” – where one major failure triggers a broader collapse – are surging.
Already, state-controlled developer Sino-Ocean has missed $A32.5 million in interest payments. And major Chinese “shadow bank” Zhongrong International Trust Co has failed to meet repayment obligations.