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China. China’s largest developer Country Garden expects its first loss since going public in 2007

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Country Garden – China’s largest developer – expects to make a loss in 2022. This is the first time since the company went public in 2007. This will be another blow to the real estate sector in the Middle Kingdom, the Guardian reported.

In a document submitted to the Hong Kong Stock Exchange, Country Garden reported that losses in 2022 would range from 5.5 to 7.5 billion yuan (approx. PLN 3.5-4.8 billion). In 2021, Country Garden’s profits reached 26.8 billion yuan (approx. PLN 17.1 billion).

The largest Chinese developer expects its first loss

According to Country Garden, the worse results are due to the COVID-19 pandemic, unfavorable exchange rates and reorganization of some projects. These problems were said to be “mostly non-cash in nature” and the company is confident of improvement in 2023.

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Last year’s government regulations aimed at curbing speculation in the real estate sector, including limits on borrowing, caused developers to stagnate in cash. Severe Covid restrictions prevented workers from leaving their homes, so construction has stalled on hundreds of housing projects. The crisis has also seriously undermined confidence in the sector, with homebuyers in 24 provinces protesting unfinished projects, reported the Guardian.

The annual sales of China’s top 100 real estate companies fell by 41%. in 2022, and more than 70 companies issued warnings about the results, the daily reported.

He added that on Monday Li Qiang, the new prime minister China, gave his first public speech in this role. Tried to increase confidence in Chinese economy and said: “The environment for the private economy will only get better and better.

During this year’s parliamentary session of China, the president Xi Jinping oversaw a review of government agencies, especially financial regulators – this is intended to give the party more oversight and control. The government wants to reduce risk in the economy and pursues the goal of growth GDP at 5% compared to 3% in in 2022

Restoring confidence in the real estate sector, which typically accounts for about a quarter of GDP, will be key to China’s economic recovery. Anne Stevenson-Yang, a Chinese economic and business analyst, said: “The government is too afraid to let developers simply go bankrupt and hand over assets to households, which is what should happen.

Main photo source: Shutterstock

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