In early September, Evergrande announced the kind of sale you'd normally see at clothing stores: '30% off all properties, one month only!”
Evergrande, China’s biggest home-builder, announced the kind of sale more commonly seen in clothing stores: “30% off all properties, one month only!” Some debated whether it was a gimmick or a genuine discount. But its motivation was clear. Deep in debt, Evergrande needed cash—and quickly. Events since then have highlighted the urgency, and also raised the question of whether its struggles threaten the wider economy.
On September 24th a letter spread online suggesting that its giant edifice was shaky. Written on Evergrande stationery, it warned of a cash crunch and appealed to the government of Guangdong, its home province, to push through approval of a backdoor-listing plan.
The Chinese government regularly rescues ailing firms, especially its state-owned enterprises. But for a private-sector company, any bail-out is likely to involve at least partial nationalisation. Evergrande may have thought it had one factor in its favour: it was not asking for money, just approval for a stock listing.
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