Evergrande strikes deal to meet Chinese bond payment, but foreign dollar investors still up in air

[shockedcanadian]

Congratulations to China for putting their local citizens first. Remember when all of the media and traitors of America jumped on Trump for saying "America First" and calling the West "suckers"?

I wonder what they will say about this realization...

https://www.cbc.ca/news/business/evergrande-deal-chinese-bond-payment-1.6185226

A teetering Chinese real estate developer unexpectedly struck an 11th-hour deal to pay some of what it owes to its domestic investors on Wednesday, but foreign investors still owed millions of U.S. dollars on Thursday have so far been left hanging.

Investors around the world have been watching property developer Evergrande Group closely this week, as the company is in danger of defaulting under its crushing debt load.

The company owes more than $300 billion US to various creditors and was struggling to meet a Thursday deadline to make payments on two of its many bonds. One payment denominated in U.S. dollars is for roughly $84 million. The other is for 232 million yuan — about $36 million US.

Evergrande surprised markets by announcing it had struck a deal with holders of its yuan bond, the vast majority of which is held by domestic investors since it is denominated in China's currency, the yuan.

The payment agreement has been "settled in negotiations outside the market," the company said, providing no detail about whether or not the payment was made in full.

 

[Otis Mayfield]

All those thousands and thousands of brand new vacant houses and apartments, that was Evergrande's doing.

No buyers.

Evergrande even force their employees to give Evergrande a loan. I've never heard of such behavior before.

They're too big to go under. It will screw up the world's economy if they do.

 

[shockedcanadian]

All those thousands and thousands of brand new vacant houses and apartments, that was Evergrande's doing.

No buyers.

Evergrande even force their employees to give Evergrande a loan. I've never heard of such behavior before.

They're too big to go under. It will screw up the world's economy if they do.

It won't screw the worlds economy if they go under, not at all. They are a local development company. The only ones who will get screwed are those Chinese citizens, banks and funds that invested in their operation. As suggsted by this article, primarily the foreign investors will get the full backhand, the local investors will probably receive some compensation in return.

Yes, I've seen some Ghost Towns in China on video. Amazing video, some massive structures, basically cities that are abandoned. Apparently in some cases the workers weren't even paid after many months on the job (not sure if it was Evergrande or not, but, the developer was appararently charged with corruption and shut down mid-development).

 

[Otis Mayfield]

It won't screw the worlds economy if they go under, not at all. They are a local development company. The only ones who will get screwed are those Chinese citizens, banks and funds that invested in their operation. As suggsted by this article, primarily the foreign investors will get the full backhand, the local investors will probably receive some compensation in return.

Yes, I've seen some Ghost Towns in China on video. Amazing video, some massive structures, basically cities that are abandoned. Apparently in some cases the workers weren't even paid after many months on the job (not sure if it was Evergrande or not, but, the developer was appararently charged with corruption and shut down mid-development).

I'm not going to say I'm an expert, but from what I've read, Everygrande going under is a danger to the world economy.

It's why the DOW dropped a day or two ago. It's back up now.

 

[Ringo]

MoA - "What Happens When China Becomes Number One?"

 

[DudleySmith]

Biden will ask for a couple of trillion to bail them out.

 

[georgephillip]

China understands the distinction between earned wealth and income and finance capitalism's pursuit of unearned wealth and unearned income:

"SEPTEMBER 30, 2021

China’s Fortune Cookie Crumbles"​

"People think that China’s advantage is its abundant, low priced labour force, or the government building infrastructure. But what’s guiding this is an understanding of the kind of economics that goes back even beyond Marx, to Adam Smith, and John Stuart Mill and the other classical economists.

"They realize that there’s a difference between earning income and creating wealth by employing labour to produce goods, to sell at a profit and then reinvest these profits and more capital formation, in contrast to simply buying a rent-yielding property, buying land and letting it rise in price without the landlord doing anything, buying a monopoly and just raising the price – charging monopoly prices like the US pharmaceutical companies are doing.

"China understands the difference between earned income and unearned income, between productive investment and unproductive investment."