Country Garden,
one of China’s biggest property developers, posted a record 48.9 billion yuan ($6.7 billion) loss in the first six months of 2023 and warned it could default on its debts.
The real estate giant’s earnings highlight the pressure facing China’s property sector amid the economy’s sluggish recovery.
The company said it felt “deeply remorseful for the unsatisfactory performance” and added that it could end up defaulting on its debts if its financial performance continues to deteriorate.
Country Garden (ticker: 2007.Hong Kong) said it missed interest payments due in August but was still within the 30-day grace period to make the payments.
While there are tentative signs of more support coming to boost China’s ailing property market, it’s likely much more will be needed.
Several Chinese state-owned banks are set to cut interest rates on existing mortgages for the first time since 2008, Reuters reported. Separately, Guangzhou became the first Chinese city to ease mortgage rules Wednesday, allowing home buyers to secure preferential loans for first-time home purchases regardless of their mortgage history.
China’s real estate sector is key to the country’s economic growth. The country estimates that it contributes as much as 30% to gross domestic product (GDP).
Write to Callum Keown at [email protected]
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