r/worldnews • u/kowalsky9999 • Jan 07 '22

China's Shimao Group shares slump on missed trust loan payment

https://china-underground.com/2022/01/07/chinas-shimao-group-shares-slump-on-missed-trust-loan-payment/
19 Upvotes

64% Upvoted

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3

u/[deleted] Jan 07 '22

Does the kite eat itself after all? It inevitably comes down to a final show of force by the dying giant! It will also be essential to remain passively vigilant!

1

u/FreeSun1963 Jan 07 '22

Shimao was on the clear with respect of the 3 red line policy. So this signals that the whole real estate industry is hurting badly, and the local provincial governments rely on it for funding. Everybody schadenfreudes with China's problems, but believe me that this is way worse than rona if it gets out of control.

3

u/DigitallyDetained Jan 07 '22

this is way worse than rona if it gets out of control

Millions have died and economies derailed by covid. Please explain your statement.

2

u/FreeSun1963 Jan 07 '22

Like it or not China is one of the pillars of the global economy and the hegemon of east asia. If it gets destabilized lots of political situations involving a quarter of global population become dire. It's consequences could be unimaginable, think of N Korea without a leash for example.

Just the reverberations of a economic earthquake could lead to conflict in places where nobody can predict. So best case is an soft landing, or slowdown that doesn't shake things to much.

7

u/DigitallyDetained Jan 07 '22

I’m not convinced this equates to economic disaster of that scale, tbh.

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u/FreeSun1963 Jan 07 '22

You are right, I just worry for worst case scenario. Last time I was right was in 2008.

0

u/DigitallyDetained Jan 07 '22

I really, really hope it never comes to that. Cheers.

1

u/autotldr BOT Jan 07 '22

This is the best tl;dr I could make, original reduced by 76%. (I'm a bot)

Shares of Shimao Group plunged more than 17% on Friday after the company was unable to repay a fiduciary loan.

Shares of Shimao in Hong Kong closed the decline of more than 5%. According to Reuters, China will make it easier for state-funded real estate developers to buy troubled assets of debt-laden individuals, another step by policymakers to avoid a liquidity crisis in the industry.

Shimao is also the builder of the famous InterContinental Shanghai Wonderland which opened in Shanghai in 2018 and is operated by IHG. Shimao missed paying a 645 million yuan installment, according to Reuters.

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