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China property
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Top Chinese think tank meets mainland developers, banks as property sector’s liquidity crisis deepens

  • The Development Research Center of the State Council met representatives from developers and lenders including Kaisa Group and Ping An Bank
  • Fitch Ratings has further downgraded Kaisa to CCC- from CCC+

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The liquidity crisis in China’s property sector is intensifying. Photo: Reuters
Martin Choi

A Chinese think tank under the control of the cabinet held a meeting with mainland property developers and financial institutions in Shenzhen amid fears of a deepening liquidity crunch in the nation’s real estate industry, media reports said.

The meeting on Monday included representatives from China Vanke, Kaisa Group, Ping An Bank, China Citic Bank, China Construction Bank and CR Trust, Reuters reported citing an unnamed source.

At the meeting with the Development Research Center of the State Council, Shenzhen-based Kaisa urged state companies to help private firms improve their liquidity through project acquisitions and strategic buyouts, the report added. Other issues about the state of the real estate sector, the risks and views on the upcoming property tax were also discussed, The Paper reported.

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Kaisa is the latest developer in China’s highly leveraged real estate industry to face a liquidity crunch, as the central bank’s tough lending curbs combined with the weakest consumer sentiment in years weighs on developers. The crisis spread from China Evergrande Group. The world’s most indebted developer is weighed down by more than US$300 billion in liabilities, including billions in fees owed to thousands of vendors, suppliers and sales agents.
Kaisa Group plans to auction 18 property projects with a combined value of US$12.8 billion in Shenzhen. Photo: Reuters
Kaisa Group plans to auction 18 property projects with a combined value of US$12.8 billion in Shenzhen. Photo: Reuters
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Kaisa has been selling assets to raise capital for liabilities including a missed payment on a wealth product and US$11 billion of bonds. Trading of its shares were halted in Hong Kong on Friday.

Fitch Ratings cut Kaisa’s rating further to CCC- from CCC+ on Tuesday, two weeks after it was downgraded by two notches from B+.

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