Posted: 10 Nov 2021 04:33 GMT
The upheavals in the Chinese real estate sector threaten to strain global finances, experts say.
The Chinese real estate Kaisa Group Holdings needs help to pay its investors, workers and suppliers, according to the company itself during a meeting with a group of government experts, banks and other companies in the Chinese sector, . reports, citing a source familiar with the affair.
The meeting took place in the city of Shenzhen on Monday, during which Kaisa, the country’s 25th largest company by real estate sales, urged state-owned companies to help private to improve its liquidity through the acquisition of projects and strategic purchases.
The company regretted that some financial institutions improperly withdrew funds from its accounts and called for the claims of asset freeze against you are handled centrally in a court in Shenzhen, where the company’s headquarters are located.
In addition, Kaisa announced on Monday on her WeChat account that it is in negotiations with investors in wealth management products about payment solutions and asked for more time to solve your cash flow problems.
Meanwhile, the credit rating agency Fitch further lowered the ‘rating’ of Kaisa on Tuesday noting a deterioration in its liquidity, undeclared debts in its wealth management products and little progress in its asset liquidation.
Kaisa is one of the many companies in the sector that are suffering a liquidity crisis in China after the credit restrictions imposed by the country’s government and the debt crisis of the real estate giant Evergrande, which is on the verge of default with a debt valued at more than $ 300 billion.
On November 11, Evergrande will have to carry out Late payments to its creditors amounting to 148 million dollars. Recently, it already defaulted on the payment of interest to some of its holders of international bonds that matured on November 6, but to avoid the ‘default’ it could go back to a 30-day extension.
“Risks to world economic growth”
Considering the scale of the debt and the cumulative effects of a potential default, the problems of the Chinese real estate sector threaten to shake up not only to the finances of the Asian giant, but also to the global ones, warn numerous experts.
Thus, the US Federal Reserve acknowledged on Monday that the situation generates risks for the financial system of the North American country.
“Given the size of China’s economy and financial system, financial stress in China could strain global financial markets through a deteriorating sense of risk, raise risks to world economic growth and affect the United States, “the central bank declared in its latest report on financial stability.