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China Firms Scramble to Divest Property Units Amid Crackdown

Tightened lending curbs in China’s real estate sector early this year has exacerbated financial troubles at some property developers, triggering sector-wide liquidity stress

The World Bank's surveys showed 46% of small and medium-sized businesses in developing countries expected to fall behind on debt payments within six months, but the number was twice as high in some countries. Photo: Reuters.


China-listed companies are increasingly divesting real estate businesses amid stricter regulatory scrutiny of the industry, according to filings and state media, in a year dominated by headlines of financial woe at China Evergrande Group.

Tightened lending curbs in the real estate industry early this year has exacerbated financial troubles at some property developers, triggering sector-wide liquidity stress.

China Evergrande, one of the country’s biggest developers, has struggled to make payments on billions of dollars worth of bonds, while smaller peers have likewise missed payments or had their credit ratings downgraded.

On Thursday, liquor and meat producer Beijing Shunxin Agriculture said it planned to sell its entire stake in a money-losing property unit.


Exiting Property Business

The announcement came two weeks after liquor product maker Hainan Yedao Group said it would sell its 40% stake in a property company to focus on core businesses and improve liquidity.

Dozens of China-listed companies, including Xiamen ITG Group Corp, Aoyuan Beauty Valley Technology and Zhangtian Financial Group have announced plans to dispose of property businesses so far this year, the state-run Securities Times reported.

Reflecting the real estate sector’s liquidity crunch, data from the China Trust Association showed outstanding investment from trust firms fell below 2 trillion yuan ($313.66 billion) at the end of the third quarter, down 26% from a year earlier.


  • Reuters with additional editing by Jim Pollard






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Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years and has a family in Bangkok.


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