Country Garden struggles to survive

Country Garden is in massive financial trouble. The company’s share price on the Hong Kong Stock Exchange fell more than 15 percent this week in part due to a looming default and enormous debt.

Country Garden is one of the country’s most important construction companies, employing tens of thousands of people. According to Forbes, the company is one of the 500 largest in the world. Until recently, its boss Yang Huiyan was the richest woman in Asia. This week Country Garden failed to make two interest payments due on loans. There is now a period of 30 days, otherwise bankruptcy threatens in September.

“We are facing the greatest difficulties since our founding,” said Yang, referring to the economy. The construction sector in China has boomed since the 1990s, but many entrepreneurs have become increasingly indebted. In 2020, the authorities enacted measures to stop over-indebtedness. Since then, developers have repeatedly failed to complete large projects. As reported, the country’s largest construction company, Evergrande, has now accumulated debts equivalent to 300 billion euros.