Title: China’s Property Giant Country Garden Anticipates Losses of Up to $7.6 Billion in First Half of 2023
Date: [Current Date]
Country Garden, one of China’s leading property developers, has raised concerns by warning of a potential loss of up to $7.6 billion (£6 billion) for the first six months of this year. This announcement comes as the second-largest global economy grapples with a series of significant challenges.
Official figures released earlier this week indicated that China has slipped into deflation for the first time in over two years, further highlighting the troubled state of the economy. Notably, exports have witnessed a sharp decline in recent times, while youth unemployment has reached a record high.
In comparison to the $265 million profit recorded for the same period in the previous year, the expected loss is staggering. To counter this upheaval, Country Garden has established a special task force, led by its Chairman Yang Huiyan, in an attempt to find solutions and turn the tide for the business.
Adding to the company’s concerns, credit rating agency Moody’s has downgraded Country Garden’s rating, citing “heightened liquidity and refinancing risks.” The agency’s decision reflects the precarious financial situation facing the property developer.
These developments are part of an array of economic challenges China is currently grappling with, raising questions about the pace of its post-pandemic recovery. The country’s high youth unemployment rate is of particular concern, given that a record-breaking 11.58 million university graduates are expected to enter the job market this year.
Highlighting the severity of China’s economic troubles, US President Joe Biden referred to China as a “ticking time bomb” during a fundraising event in Utah. Biden noted the country’s daunting levels of unemployment and an aging workforce as contributing factors to its economic challenges.
Meanwhile, China also confronts enormous local government debt and struggles in its housing market. Last month, Evergrande, once China’s largest real estate firm, revealed combined losses of $81.1 billion for 2021 and 2022. The company’s default on its debts last year further exacerbated its financial woes, with an estimated $300 billion in outstanding debts.
These colossal losses suffered by Evergrande highlight the profound impact of the property market crisis that has plagued China in recent years. The ongoing struggles faced by large developers like Country Garden and Evergrande underscore the fragility of the Chinese economy.
As China navigates through these economic challenges, the global business community remains watchful of how the government and private enterprises respond to stabilize the situation and revive economic growth.
Disclaimer: This article is based on the provided content by Peter Hoskins, a business reporter.