Country Garden, a major Chinese property developer, continues to face financial pressure but was recently able to avert an acute crisis by meeting interest obligations on time. The company confirmed the payment of 8.5 million euros in interest for domestic bonds, which occurred after a five-day grace period. These bonds had been issued in May 2023.
The current payment is made in an economic environment in which the real estate market in China, which accounts for a quarter of the country's gross domestic product, is experiencing ongoing turbulence. Just recently, China Evergrande, the world's most indebted real estate company, was declared insolvent in Hong Kong.
Despite the size of Country Garden, which owns nearly four times as many real estate projects in China as Evergrande, the company is less indebted. As of the end of June 2023, liabilities amounted to about 180 billion euros, with 14 billion euros due within the next twelve months.
These developments cast a spotlight on the still precarious situation in the Chinese real estate market and pose a significant challenge for both investors and the country's economy.
