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Passe-Muraille n°148 – National security in danger, purge in preparation, Paracels …

Passe-Muraille n°148 – National security in danger, purge in preparation, Paracels …

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Le Passe Muraille is the weekly format of EastIsRed. A newsletter composed according to current events, facts and analyzes selected by me, for new content. Good reading ! Noah

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Le président d'Evergrande, Xu Jiayin, would be under residential surveillance by the police

People familiar with the matter have revealed that Xu Jiayin had been arrested by Chinese police earlier this month and was currently under residential surveillance in a location chosen by the authorities.

Bloomberg reported that it is currently unclear why Xu Jiayin was placed under residential surveillance. This morning, Evergrande shares fell by 20% on the HK Stock Exchange (NBD).

Previously, The Shenzhen Nanshan Public Security Bureau announced via its official WeChat account the arrest of executives from Evergrande Financial Wealth Management (Shenzhen) Co., Ltd. The police report does not specify the number of people arrested, the charges against them nor the dates of their detention.

Real estate continues to pose a problem in China. Essential engine of its growth, and main object of savings for residents, this market has been experiencing significant turbulence for years.

Pour Li Daokui [Li Daokui], economist who formerly served as an advisor to China's central bank, “the real estate market could take at least a year to recover”. He urges the authorities to lend more to developers to limit the risk of collapse. In effect, data compiled by Bloomberg indicates that the volume of these loans continued to fall from April to August by approximately 25% I and. Pour Li Daokui, the real estate market needs a liquidity injection of approximately 13 billion euros to recover. This amount corresponds, according to him, at the cost of the confidence of investors who fear payment defaults, which have succeeded one another since 2019.

The latent real estate crisis is spreading to related sectors. This week, Adway Construction [Adway Construction], a listed company providing interior and exterior decoration and design services, filed for bankruptcy following too many payment defaults.

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