Did you know?China's real estate market is facing unprecedented risks. Evergrande Group, once one of China's largest real estate companies, is now in an unprecedented financial crisis. Its founder, Xu Jiayin, was even more imprisoned.
This crisis not only exposed the financial fraud and illegal problems within Evergrande Group, but also showed us the possible collusion between real estate companies and banks. Before Xu Jiayin**, he confessed to two "big criminals", two high-level executives in China's banking industry, namely Tian Huiyu, president of China Merchants Bank, and Sun Deshun, president of China CITIC Bank. Their actions involved providing illegal loans to real estate companies like Evergrande during the loan approval process in order to obtain huge kickbacks and benefits, resulting in the loss of bank funds, the volatility of the real estate market, and the loss of people.
Tian Huiyu, president of China Merchants Bank, was once a leading figure in China's banking industry. However, during his tenure as president, he provided more than 100 billion yuan of loans to Evergrande and other real estate companies through illegal means, including illegal payments. Tian Huiyu accepted bribes from Evergrande, including cash, ** real estate, cars, etc., with a total value of more than 1 billion yuan.
This corrupt act not only damaged the interests and reputation of China Merchants Bank, but also disrupted the order of the real estate market. He was filed for review and supervision investigation by the ** Commission for Discipline Inspection and the State Supervision Commission in September 2021, and then transferred to the judicial authorities in October 2021 on suspicion of ** crimes.
Sun Deshun, president of China CITIC Bank, was also a key executive in China's banking industry. However, during his tenure, China CITIC Bank provided more than 80 billion yuan in loans to real estate companies such as Evergrande, including payments made in violation of regulations. Sun Deshun accepted bribes from Evergrande, involving cash, real estate, cars, etc., with a total value of more than 800 million yuan.
This corrupt act also damaged the interests and reputation of China CITIC Bank and disrupted the order of the real estate market. He was filed for review and supervision investigation by the ** Commission for Discipline Inspection and the State Supervision Commission in September 2021, and then transferred to the judicial authorities in October 2021 on suspicion of ** crimes.
These two "big criminals" are not only Xu Jiayin's partners, but also key supporters of Evergrande Group. Their arrest deprived Evergrande of key financial support and shook the trust of the two banks in Evergrande.
Evergrande Group's loans were difficult to renew, let alone obtain new loans, and the rupture of the capital chain led to its operational difficulties. This has added a more severe situation to the debt crisis of Evergrande Group, making it difficult for it to escape the fate of collapse.
This financial crisis has not only made the situation worse within Evergrande Group, but also affected other real estate companies and financial institutions, forming a systemic risk. Xu Jiayin's fall and the revelation of the bank's shady scenes have caused the entire real estate market to enter a turbulent period.
Evergrande Group's creditors, investors, owners and employees have demanded repayment of debts, and even triggered ** and rights protection incidents in many places. These risks are not limited to Evergrande, but also spread to the entire real estate industry, causing a serious impact on China's economy.
The financial crisis has led to the instability of the real estate market, the volatility of housing prices, the loss of confidence of home buyers, and the huge impact on people's lives. The problem of unfinished properties is also becoming more and more prominent, bringing a double blow to both home buyers and developers. This is not only a crisis related to the life and death of enterprises, but also a social storm affecting thousands of households.
In the face of this financial crisis, we need to seriously rethink the development model of the real estate industry. A model of high leverage, high debt, and high turnover may work during a boom market, but once the market changes, the risks can be rapidly magnified. ** and the regulatory requirements of the regulatory authorities are to maintain the market order and the legitimate rights and interests of the people, and enterprises need to respond prudently and find a sustainable development path.
The crisis has also been a painful lesson for the banking industry. Banks should be more prudent when providing loans to real estate enterprises and put an end to illegal operations. Strengthen internal supervision, standardize loan approval procedures, and ensure the stability of the financial system. Only in this way can we avoid similar financial risks and ensure the safety of the financial system.
Finally, we also expect Evergrande Group to usher in a turnaround by adjusting its strategy, controlling its debt ratio, reducing leverage, and improving its operating efficiency. The real estate market is one of the pillars of China's economy, and it is hoped that with the joint efforts of regulators, enterprises and society, this crisis can be resolved and the sustainable development of the real estate industry can be achieved.