How Country Garden Plays Into China’s Property Mess

China’s real estate crisis is rumbling on, depriving the world’s No. 2 economy of one of its biggest growth drivers. A series of policy moves has failed to revive demand as homebuyers remain deterred by falling prices and concerned that troubled builders will struggle to finish apartments. One of the biggest casualties of the slump is Country Garden Holdings, once China’s largest property developer, which posted a record loss in August and now faces potential liquidation.

Headquartered in the southern city of Foshan, Country Garden was China’s largest developer by contracted sales from 2017 — when it took the top spot from China Evergrande Group — through 2022. (It dropped to seventh place in 2023.) Its operations are focused in smaller cities, which expanded faster in good times but have been harder hit by the housing slump and economic slowdown than first-tier cities such as Beijing and Shanghai. Country Garden has acknowledged it didn’t adopt timely measures to deal with the slowdown and failed to recognize the risks of its heavy reliance on lower-tier markets. In September it missed initial deadlines to pay $55.4 million on two dollar bonds, and in late October, after issuing a warning and hiring advisers, it was deemed to be in default. In late February, a Hong Kong court received a creditor’s petition to liquidate the company over non-payment of its debt. Country Garden chair Yang Huiyan, once Asia’s richest woman, has seen her fortune plummet.