"In China, land reserves are the most valuable assets,” Du said. “This is Evergrande’s biggest asset and last resort.
“For example, for a land parcel, Evergrande’s acquisition cost is 1 billion yuan, and the land itself is worth 2 billion yuan, but the buyer may only offer 300 million yuan,” Du said. “If we sold at a loss, we would have no capital to revive.”
For his part, Xu maintained that Evergrande could repay all its debts and recover as long as it turns land into houses and sells them"
There are surplus millions of housing units already in the market. How many millions of additional units are undeliverable as is. The Ghost city phenomena has been staring everyone in the face for more than a decade, and yet action persists to continue with more of the same.
Selling land to Build evermore housing units is piling Mal Investment on top of Mal Investment.
This is pure Ponzi stuff.
At every level, buyers, suppliers, land holders, all facing a demographic time bomb, that will hit by 2033. |
