Chinese Government Holds Meeting with Real Estate Developers to Discuss Countermeasures

[Photo by Reuters-Yonhap News]

[Asia Economy Reporter Park Byung-hee] The Chinese government reportedly held a situation review meeting with real estate developers that have issued a large amount of offshore dollar bonds. The meeting appears to have been held to assess the current real estate market situation and review crisis response measures in relation to the recent liquidity crisis of Evergrande Group, China's second-largest real estate developer.

On the 25th (local time), the National Development and Reform Commission (NDRC), China's main economic planning authority, convened a meeting with several real estate developers, according to the economic media outlet Caixin on the same day.

The specific list of companies summoned to the meeting was not disclosed, but it is known that they were mainly companies that have issued a large amount of dollar bonds.

Caixin estimated that the NDRC likely reviewed the status of offshore bond maturities and the repayment capabilities of the respective companies. Caixin also analyzed that the meeting served as a message that the government is striving to stabilize the real estate market.

The scale of dollar bonds that Chinese real estate companies must repay next year and the year after is estimated to be 375.5 billion yuan (approximately 68.8 trillion won) and 300 billion yuan, respectively. The scale of yuan-denominated bonds that Chinese real estate companies must repay after next year far exceeds that of dollar bonds.

Evergrande Group's debt exceeds 300 billion dollars. On September 23, Evergrande failed to pay 83.5 million dollars in interest on its dollar bonds, but just before the end of the one-month grace period on the 22nd, it paid the interest, temporarily avoiding a default crisis. However, smaller real estate companies such as Huayangnian (Fantasia) and Xinli (Sinic) have recently failed to repay principal and interest on dollar bonds consecutively and declared defaults, increasing anxiety surrounding the real estate market.

International credit rating agencies such as Moody's have recently downgraded the credit ratings of more than ten Chinese real estate developers, including Ludi Holdings and Fuli Real Estate. The number of Chinese real estate developers whose credit ratings have been downgraded this year has exceeded 100, setting a record high.

This content was produced with the assistance of AI translation services.