Chinese real estate giant reveals staggering $81 billion loss amid slump

Chinese real estate developer Evergrande has disclosed losses of $81 billion over 2021 and 2022, underscoring how its massive debts remain a serious concern for the financial health of the Chinese property sector — and the world’s second-largest economy overall.

Chinese real estate developer Evergrande has disclosed losses of $81 billion over 2021 and 2022, underscoring how its massive debts remain a serious concern for the financial health of the Chinese property sector — and the world’s second-largest economy overall.

China’s post-pandemic recovery is threatened by the sluggish real estate sector, which is still responsible for a quarter of the economy’s growth.

As one of China’s largest builders of apartments, Evergrande slid rapidly into financial distress in late 2021, causing alarm around the world as some analysts feared a collapse that could be China’s “Lehman moment” — and the start of another financial crisis.

Aside from the $81 billion in losses, Evergrande’s total liabilities continued to grow in 2022, reaching $335 billion compared with just $251 billion in assets, according to the earnings statement.

Lingering uncertainty over Evergrande’s fate reflects the poor state of the sector — and threatens to worsen it, analysts warn.

“Evergrande’s insolvency, beyond its own liquidity coming to a standstill, is also related to the cooling of housing sales” and the increased pressure for indebted property developers to finish projects, Xie Yifeng, president of the China Urban Real Estate Research Institute, told state-run Beijing Business Today. “It’s a vicious cycle.”