Evergrande default an individual case: central bank
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E-mail Xinhua, October 16, 2021
The indebtedness of property developer China Evergrande Group is an individual case in China's real estate sector, which is generally sound, the country's central bank said Friday.
Land and housing prices in the domestic property market remain stable thanks to years of regulation and a long-term housing mechanism, Zou Lan, an official with the People's Bank of China, told a press conference.
The majority of Chinese real estate businesses are running steadily with positive financial performance, Zou said.
Instead of operating prudently in response to market changes, Evergrande stuck to reckless expansion into multiple sectors in recent years. The poor management has worsened the developer's financial conditions, leading to the final outbreak of risks, according to Zou.
The financial liabilities are less than one-third of the developer's total liabilities, Zou said, stressing that its spillover risks on financial institutions are overall controllable.
Related authorities and local governments are mitigating the risks in a law-based and market-oriented manner and urging Evergrande to accelerate the disposal of assets and the resumption of halted construction projects, Zou said.
