IC - The trader12 Sep 2022 15:53
Receivers move in on Evergrande HK
The Evergrande saga continues to weigh on investor sentiment. It has emerged that the property group’s Hong Kong headquarters has been seized by a lender after Evergrande defaulted on a loan and twice failed to sell the 26-storey Wan Chai office tower, which is valued at roughly $1.2bn (£1.15bn).
In addition to its property sector woes, the world's second biggest economy has been forced to deal with the impact of severe drought, rising youth unemployment and stalling growth. Official surveys released have revealed that China's manufacturing industry contracted in August for the first time in three months. Food prices are also steadily increasing, which, along with the rising youth unemployment rate, could lead to civil unrest.
All this has been made worse by Beijing’s fixation with a zero-Covid policy that has triggered lockdowns in some of the nation’s largest conurbations. And though the renminbi has depreciated against the US dollar, an export-led recovery is unlikely given falling aggregate demand in the global economy.