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Chinese vice premier says property crisis can be contained

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Vice Premier Liu He, who oversees China’s economic and financial policies, emphasized that China’s property market crisis, which struck fear among investors all over the world, was in general control.

china property crisis

As reported by local media, Liu He made the statement at a financial forum in Beijing on the 20th. “As a result of the default crisis, the real estate sector is meeting reasonable capital needs and developing constructively,”. “China has a very large economy and a strong tolerance,” Liu said. “This strength comes from the competitiveness of market players, the solid economic structure, and the wise policy of reform and opening up accompanied by the constant pursuit of the enormous market and people.”

“China will be able to fully achieve its development goals this year with its inherent strong tolerance,”. He emphasized efforts to prevent financial risks and promote small and medium-sized financial institutions. “While eliminating the default crisis for a few large companies” he further noted.

The Evergrande Group’s property crisis has been threatening China’s real estate sector since July. The Guardian reported on the 20th that the group tried to sell its 51% stake in Evergrande Property Services Group, a profitable property management company, for $2.6 billion to pay off its debts. Negotiations, however, had failed.

An additional $1.7 billion was expected to be raised from the sale of Evergrande’s headquarters on Hong Kong’s waterfront. However, both deals collapsed due to disagreements with the local government.

China’s second-largest property developer, Evergrande Group, has gained international attention following the announcement of severe financial challenges in July. As of today, the group owes 1.95 trillion yuan ($310 billion), which is more than the gross domestic product of Finland ($300 billion).

On the 29th of last month and the 11th of this month, Hengda Group missed interest payment deadlines.

For MetaNews.

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