One of China’s biggest developers, Country Garden, has warned it could face a loss of up to $7.6 billion in the first six months of 2023, the BBC reported. He added that this is another sign of serious problems faced by the world’s second largest economy.
He added that shares of Country Garden Holdings fell more than 5 percent. on the Hong Kong Stock Exchange on Friday afternoon.
Country Garden expects to record a net loss of approximately $6.24 billion. to $7.6 billion for the six months ended June 30, 2023. In the first half of 2022, the company had a profit of $265 million.
The company also said it had set up a special task force headed by CEO Yang Huiyan to find ways to improve the situation.
Problems of the Chinese economy
On Thursday, Moody’s downgraded the company’s rating, citing “heightened liquidity and refinancing risks”. This came as China faced a series of economic challenges that raised questions about the pace of economic recovery from the pandemic, the BBC pointed out.
He added that earlier this week, official data showed that the country’s exports fell by 14.5% in July. compared to the previous year, while imports fell by 12.4%. Youth unemployment, which is at a record high, is also being watched closely as a record 11.58 million college graduates are expected to enter the workforce this year. The country is also struggling with rising local government debt and challenges in the housing market.
Last month, Evergrande, once China’s largest real estate company, revealed that it lost a total of $81.1 billion in 2021 and 2022. Evergrande is struggling with debt estimated at $300 billion. the BBC’s website reported.
He also pointed out that the huge losses underline how much the developer has been shaken by the crisis in the real estate market in China in recent years. Problems in China’s real estate sector – which includes everything from building houses to the home appliance industry that houses them – could have a big impact on the country as it accounts for about a third of the economy.
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