China's struggling property developers won't be getting a major bailout, authorities indicated, warning that those who "harm the interests of the masses" will be punished.
It’s actually quite funny how people foresaw the downfall of the Chinese economy following Evergrande, and it just kinda carried on as normal because the Chinese govt refused to bail them out.
No doubt some people are gonna get burned by that policy too, but they made the right choice by not rewarding a company that clearly had significant financial management issues.
Meanwhile here in italy when a major company fails and goes bankrupt because of shitty management, corruption and greed, we first “save” it with public funds, then sell it to someone else to profit off of it
Not only that company but any other one is going to be incentivized to be irresponsible with their accounting and financial practices. What’s going to happen if Google or Microsoft broke? Are they going to be rescued too?
Property developers in China, unlike banks in the US, are not the backstop of the economy. They are not too big to fall: it’s just that their distressed assets need to be managed to minimize losses to their customers.
It’s actually quite funny how people foresaw the downfall of the Chinese economy following Evergrande, and it just kinda carried on as normal because the Chinese govt refused to bail them out.
No doubt some people are gonna get burned by that policy too, but they made the right choice by not rewarding a company that clearly had significant financial management issues.
Meanwhile here in italy when a major company fails and goes bankrupt because of shitty management, corruption and greed, we first “save” it with public funds, then sell it to someone else to profit off of it
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Not only that company but any other one is going to be incentivized to be irresponsible with their accounting and financial practices. What’s going to happen if Google or Microsoft broke? Are they going to be rescued too?
Property developers in China, unlike banks in the US, are not the backstop of the economy. They are not too big to fall: it’s just that their distressed assets need to be managed to minimize losses to their customers.
General Motors isn’t the backstop of the economy and they were rescued too.