[Epoch Times October 25, 2021](The Epoch Times reporter Li Linqing interviewed and reported) Recently, Evergrande Group Chairman Xu Jiayin announced three strategies for resolving risks and self-rescue: guaranteeing the delivery of buildings, selling existing buildings, and transforming into the new energy automobile industry. According to expert analysis, Xu Jiayin may have reached certain agreements with the Beijing authorities, and state-owned enterprises and state-owned assets will gradually take over their main real estate business.
On October 22, Xu Jiayin revealed at the Evergrande Group’s resumption of work and production conference that all the buildings or projects that Evergrande has not pre-sold will be sold on site in the future. He also announced that the sales scale of real estate will drop from more than 700 billion last year to about 200 billion a year within 10 years, and the industrial transformation from real estate to new energy vehicles will be completed in 10 years.
Xu Jiayin emphasized that “resuming work and resuming production to ensure the delivery of buildings” is Evergrande’s current top priority, which is the basis for resolving debts.
According to Lu Media, this means that in the future, Evergrande will form an industrial structure with new energy vehicles as the mainstay and real estate as the supplement.
After Xu Jiayin put forward the three major strategies of self-help, many mainland bloggers and netizens questioned, “Hengda has expanded it: in the future it will only sell existing houses. In fact, we still ask for money.” “Deliver the house we bought before.” …” The message area is full of words, first to cash out the overdue financial investment or owed wages and so on.
Expert: You need the support of the creditor bank to guarantee the delivery
Yu Weixiong, an economist at the Anderson School of Management at the University of California, Los Angeles, said in an interview with Epoch Times on October 24 that he has reservations about Evergrande’s own ability to “return work and production to ensure the delivery of buildings”.
Yu Weixiong said that the outside world may not be able to predict whether Evergrande will be able to bring it back to life, because this involves whether the Beijing government decides to rescue it. “If Evergrande can get the support of some creditor banks or the support of the government, and then take some measures to break the arm of the strong, (return to work to ensure the delivery of the building) is also possible.”
According to his analysis, China’s economic and real estate business environment is not good today. The era of high growth in real estate driven by investment debt is gone forever. In the future, more and more real estate companies will face debt defaults and it will be difficult to bail out. .
Although Xu Jiayin announced that all will be sold on site in the future, Yu Weixiong believes that consumers will still take risks into consideration. If the purpose of buying a house is investment, it is risky to start at this time; if you choose to live by yourself, you must also consider the surrounding environment and the occupancy situation.
Xu Jiayin publicly stated his opinions as experts: there may be official instructions
The Epoch Times columnist Wang He stated in an interview on October 24 that Evergrande may have reached some agreements with the Chinese Communist government and some of its major creditors in private.
“Xu Jiayin dared to state that there should be forces behind him to support him. It is most likely that the central government has intervened in this matter, so he dared to say this.” Wang He said.
Wang He said that the Chinese Communist government also does not want Evergrande to collapse completely. Evergrande has projects in hundreds of cities across the country. The local governments are thinking about how to cannibalize Evergrande once it goes bankrupt. Therefore, Evergrande will mainly talk to the Central Bank of the Communist Party of China and the Ministry of Housing and Urban-Rural Development, and these departments will coordinate the overall situation.
In August of this year, the heads of relevant departments such as the Central Bank of the Communist Party of China, the Ministry of Housing and Urban-Rural Development, and the China Banking and Insurance Regulatory Commission interviewed Evergrande executives. Wang He believes that before Xu Jiayin announces the three strategies this time, he is very likely to discuss with the central government departments, and they will coordinate the protection of the building. “After all, the protection of the building is the only way for Evergrande to get rid of the current predicament and get out of the deadlock.”
Wang He pointed out that Evergrande’s existing property sales strategy is no solution, because Evergrande wants to sell futures in the current crisis, and no one has taken his order. “Because consumers are now waiting and watching. Afraid of risks, and fear that the builders will go bankrupt if they fail to build them.”
Evergrande said ten-year transformation analysis: state-owned assets or take over the main business of real estate
In response to Xu Jiayin’s statement that the scale of real estate will be reduced in the next ten years and the transition to new energy vehicles, Wang He believes that this reveals a trend that state-owned enterprises and central enterprises are preparing to take over Evergrande’s real estate industry.
“Hengda has been doing this for so many years. It definitely still has a lot of high-quality resources. It has a lot of land reserves, with a land reserve of more than 400 billion yuan.” He said, “The sales scale of Evergrande real estate has increased from more than 7,000 last year. 100 million yuan, the pressure drops to about 200 billion yuan per year in 10 years. This means that Evergrande will abandon real estate and transfer a large amount of real estate assets and businesses. The state-owned enterprises must take over.”
According to the Evergrande Interim Report, as of June 30, Evergrande had 778 total land bank projects, with the original value of the land bank being 456.8 billion yuan. In addition, Evergrande has 146 old renovation projects, including 131 in the Greater Bay Area.
Wang He believes that, while taking over Evergrande’s assets, the CCP has forced Evergrande into an industrial field that is in line with the CCP’s promotion, that is, the new energy vehicle field, to achieve its goal of “removing from the virtual to the real” economically, and to achieve it in the real estate industry. The political goal of “the country advances and the people retreat”.
“Real estate is originally a bubble industry. The CCP has always wanted to get rid of the real estate’s kidnapping of the national economy. It directly used Evergrande’s crisis to force Evergrande’s main business to switch from real estate to new energy vehicles that conform to the CCP’s industrial policy. “
Earlier, Evergrande reported that two transactions had both failed, including Guangdong real estate developer Hesheng Chuangzhan intends to acquire a majority stake in Evergrande Property, and Yuexiu Property is preparing to acquire Evergrande’s Hong Kong headquarters building.
Wang He said that it is clear that the CCP has a set of far-reaching considerations in its “rescue” Evergrande, and it is making a comprehensive plan. “The CCP took advantage of Evergrande’s troubles and made a slash; in the Evergrande crisis, the CCP regime became the predator of the greatest interests and achieved its political goals.”
Editor in charge: Lin Congwen#
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