In Shakespearean Decline, Yang Huiyan's Fortune Crumbles With China's Real Estate Sector

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Zinger Key Points
  • Once Asia's richest woman, Yang Huiyan faces a staggering 84% wealth plummet as Chinese real estate crashes.
  • Government borrowing crackdowns in 2020 triggered a cascade of offshore defaults, reshaping China's property landscape.

Yang Huiyan’s story reads like a Shakespearean tragedy.

Once celebrated as Asia’s wealthiest woman, she’s seen a staggering decline in her fortune due to turbulence in China’s property sector. As the chair of Country Garden Holdings Co Ltd CTRYF she's watched her personal wealth plummet by a staggering 84% in just over two years.

The downfall of Country Garden, a once-darling real estate behemoth in China’s housing market, paints a concerning picture.

The company issued guidance on Thursday, stating that it anticipates a loss of up to $7.6 billion in the first half of this year, a sharp decline from its reported profit of $264.3 million during the same period last year.

How'd That Happen? Several factors contributed.

A government crackdown on excessive borrowing in 2020 exacerbated liquidity problems for property developers, leading to a chain of offshore defaults and eroding billions from the industry, according to Bloomberg. The measures aimed to rein in the relentless expansion by property developers, but they also ignited a cash crunch that stalled construction and left countless homeowners in limbo.

Country Garden’s predicament, intertwined with missed bond payments and looming debts, further underscores the depth of the industry’s crisis.

Huiyan’s attempts to salvage her sinking ship have been nothing short of Herculean. Records indicate that since Country Garden’s listing in 2007, Yang and her family infused roughly $4.9 billion into the company, utilizing new loans, share and bond purchases.

Read also: Rate-Locked Homeowners Fuel Housing Shortage Amid Still-High Mortgage Rates

Yet, despite the Yang family's hefty contributions, the company’s liquidity remains “weak,” as highlighted by Moody’s "very high risk" assessment, CNN noted.

Country Garden's alarm bells may not be restricted to China’s shores, as Alfredo Montufar-Helu, head of the China Center for Economics and Business, warned. “The global economy is losing one of its engines of growth,” Montufar-Helu said, according to CNN, referencing how China's real estate market is the "main drag" on demand, confidence levels and industrial productivity.

Public sentiment in China seems to reflect frustration and uncertainty, with investors on Chinese social media platforms buzzing with concerns about the fate of their investments, the future of the housing market and the accountability of real estate giants.

Comments like "Systemic problems, ordinary people pay the bill" reflect some of the collective angst of the populace, the New York Times reports.

Huiyan’s decline, from her zenith as China’s richest woman at 25 to the current crisis, stands to highlight the volatile nature of the property industry and the broader economic challenges facing China.

"The severe winter of the real estate industry has come," An Guanglu, a Shaanxi Province-based writer said, according to the Times.

"Let's see who can survive."

Read next: Can New Zealand’s Upzoning Success Provide A Blueprint To Surging US Home Prices?

Photo via Shutterstock.

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Posted In: AsiaNewsGlobalTop StoriesMarketsMediaTrading IdeasGeneralReal EstateChinaHousingYang Huiyan
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