Exclusive | Country Garden pledges refund for Forest City buyers caught in Beijing’s crackdown on capital outflows
China’s tighter capital controls are forcing developers to walk away from the domestic market when it comes to selling overseas projects
Country Garden Holdings, whose Forest City project in Malaysia is the biggest overseas project by a Chinese property developer, said it will refund money to mainland investors caught up in Beijing’s escalating crackdown on capital outflows.
The move is the latest consequence arising from Beijing’s tighter policy on capital controls, with most Chinese developers engaged in selling overseas properties now forced to shift their focus from mainland buyers to other countries.
“We have completely stopped our sales in [mainland] China,” Zhu Jianmin, vice-president of Country Garden, told the South China Morning Post last month in Hong Kong, referring to its flagship Malaysian housing project in Johor, which launched sales in 2015.
In March, the property giant closed all its Forest City sales centres on the mainland, a move first reported by the Post, after stricter government scrutiny on capital leaving China.
For buyers who made down payments on properties at Forest City but are no longer able to transfer the rest of the payment out of China, “they can cancel the transaction and there is no need to pay a forfeit fee”, Zhu said.
Zhu emphasised that the project always abided by the rules and regulations of both Malaysia and China and that only about 5 per cent of buyers were considering withdrawing their purchase.