To judge by the high-rises dotted along the shore in Haiyang, a small coastal city, Country Garden’s prospects are pretty meagre. The firm, China’s biggest developer by sales, has sold few beachside flats. A handful of towers appear only partly built. A faux-German village with pointed roofs accommodates shops and restaurants, and adds a bit of flair. But it, too, is nearly empty. The company’s failure to sell homes was made clear when its profits for the first half of 2022 nearly evaporated altogether.
Country Garden is not the only Chinese developer to have faced difficulties. The volume of floor space sold across the country fell by 24% in 2022, the biggest slump since data became available in 1992; property investment was down 10% year on year, the first drop on record. Cross-border defaults are also proving difficult. Evergrande, the world’s most indebted developer, which collapsed in 2021, has still not produced a restructuring plan originally due in July. The firm’s auditor, PwC, resigned on January 16th. This reduction in activity has been catastrophic for China’s economy, which derives around a fifth of its growth from the sector.