this post was submitted on 25 Aug 2025
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Chinese property giant Evergrande's shares were taken off the Hong Kong stock market on Monday after more than a decade and a half of trading.

It marks a grim milestone for what was once China's biggest real estate firm, with a stock market valuation of more than $50bn (£37.1bn). That was before its spectacular collapse under the weight of the huge debts that had powered its meteoric rise.

Experts say the delisting was both inevitable and final.

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[–] roguetrick@lemmy.world 36 points 4 months ago* (last edited 4 months ago) (2 children)

It's been pretty much party line that they want this to happen for some time now. Pooh bear famously made this houses are for living in speech and directly wanted to knock out speculation. They do not want to be the West and define themselves by asset prices rising with no relationship to productivity. What the West would view as a major crisis then is the CCP's intended effect. They specifically targeted these highly leveraged developers with the theory (correct in my opinion) that the loans themselves are what are driving this "growth" and it's largely creating a situation of extraction that's pricing out regular Chinese from housing. Even making noises in that direction would seriously spook Western housing prices. Harris's solution was famously increasing lending if you remember.

[–] wewbull@feddit.uk 11 points 4 months ago (2 children)

I'm not sure I follow what you're saying, but it sounds like...

The CCP plan was:

  • Drive growth of megacorporation through massive loans
  • Megacorporation builds properties
  • Megacorporation has massive losses and defaults on loans
  • profit???
[–] roguetrick@lemmy.world 23 points 4 months ago* (last edited 4 months ago)

Not really. What they identified was

  • megacorp buys property
  • megacorp takes loan based on property+development
  • megacorp buys property
  • land value increases due to all the property buying
  • megacorp leverages the land value increase(now the loans are being driven by loans)
  • property development becomes completely divorced from any actual need, instead becoming an investment vehicle

This is the financialized model that pretty much drives the western economy. China rightfully saw this as undesirable and put limits on how much developers could borrow based on assets. And this is the result. Realize that many of these loans were foreign investments.

https://en.m.wikipedia.org/wiki/Three_red_lines

[–] Not_mikey@lemmy.dbzer0.com 4 points 4 months ago (1 children)

Sounds like profit to me, houses and buildings got built, rent and housing prices are going down. Sucks for the megacorp though.

[–] wewbull@feddit.uk 1 points 4 months ago

...and the people who gave out the loans. That's where I'm expecting things to have an effect, much like 2008. A property company can crumble, but governments are much more protective of banks.

[–] flamingo_pinyata@sopuli.xyz 5 points 4 months ago

Just my speculation but this policy might be a significant contributing factor to the growth of Chinese economy.

Rising prices of assets lock up money that would otherwise be used for more productive investment.