A couple of things to note: 1.) Why did it take Evergrande 3 years to liquidate? In western countries, liquidation happens in a few months. One should note t

A couple of things to note: 1.) Why did it take Evergrande 3 years to liquidate? In western countries, liquidation happens in a few months. One should note that Evergrande did not get that big by itself; obviously it had the support of CCP elites to secure huge bank loans. Therefore, when it went bankrupt, the delay was to allow these elites to pull money/liquidable assets out of Evergrande. Thus after 3 years, Evergrande probably has pretty bad mark-to-fantasy assets left. This bodes very ill for creditors. Foreign creditors account only for $25B of the $300B liabilities for Evergrande. https://apnews.com/article/china-evergrande-property-liquidation-order-7965ab1ec2f0208c53f9298daf8b9fd0 https://apnews.com/article/china-evergrande-property-liquida... 2.) This event implies that most of the Chinese real estate developers are bankrupt/insolvent. excluding for Li Ka Shing's portfolio most likely. 3.) Evergrande's assets are mostly comprised of lands in China. This means, most of the lands will get returned to local governments, which will increase land inventory massively. This will accelerate the real estate price decline in all parts of China, on top of the 30-40% drop we're seeing in Tier 1 cities, on top of the 50-60% drop we're seeing in non-Tier 1 cities. 4.) What does this mean for China's 3 pillars of economic engine (real estate, consumer spending, export)? real estate comprises of 25-30% of Chinese economy, so the economy will be forced to mark to reality these assets, and will take a huge hit. Consumer spending is tied to real estate engine, since most of the citizens' wealth is in real estate. Thus we are seeing consumer spending decline and downgrade substitution patterns. Case in point: recent $1 McDonald burger deal was causing shortages in China. Haidilao has been focused on a cheaper version of their hot pot, which costs $10. $1 bread shops are spreading across China. 5.) If real estate and consumer spending is crashing, then China can only rely on export, and thus the trend of dumping abroad will continue. Especially cars and solar. Europe is in the middle of looking into applying tariffs to Chinese EVs. US is already set with heavy tariffs on Chinese EVs. Note that Chinese export to US and Europe has dropped 10% and 20% y/y. EDIT: also coincidently, Chinese authorities just banned short selling https://www.reuters.com/world/china/china-securities-regulator-suspends-restricted-share-lending-monday-2024-01-28/ https://www.reuters.com/world/china/china-securities-regulat.... This is following the Chinese stock market decline of 11% this year. and 3 year cumulative decline.