BRICS member Evergrande, China's largest real estate developer, was ordered by a Hong Kong court on Monday to liquidate $300 billion in assets. Real estate giant Evergrande has failed to present a concrete restructuring plan that would make it the world's most indebted real estate developer. Evergrande was unable to present a restructuring plan, even though several court hearings were delayed for months.
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However, Judge Linda Chan cited Evergrande's failures in its restructuring plan and ordered it to clear more than $300 billion in debt. “It's time for the courts to say enough is enough.” Judge Chan said this in his final court verdict.
Evergrande's business operations will make it difficult to focus on its revival going forward. “This is not the end, but the beginning of a long liquidation process, which will make Evergrande's daily operations even more difficult.” Gary Ng, senior economist at Natixis, said:
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“Most of Evergrande's assets are in mainland China, so there is uncertainty about how creditors can seize assets and the repayment order of offshore bondholders, making the situation difficult for shareholders. It could get even worse.” he told Reuters.
BRICS: China's economy will be hit hard in 2024
The economy of China, a BRICS country, is not in a good place in 2024 as its top corporate giants are facing bankruptcy. China's yuan continues to go downhill along with the economy, with growth remaining stagnant for three years. The tailwinds could continue and have ripple effects in other sectors of the Chinese economy.
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This gives BRICS a position as China spearheads de-dollarization efforts around the world. If BRICS country China cannot save its multibillion-dollar real estate giant, other developing countries may not follow the de-dollarization trend.
The stakes are high for the BRICS, and ditching the US dollar is not as easy as they think. While the US economy is gradually emerging from the crisis, China, a BRICS country, is in crisis.
