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Chinese property giant Evergrande under ‘tremendous pressure’

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Embattled Chinese property giant Evergrande on Tuesday conceded it is under “tremendous pressure”, a day after insisting it will avoid a bankruptcy that many fear could have a huge impact on the world’s number-two economy.

The Hong Kong-listed developer is sinking under a mountain of liabilities totalling more than $300 billion after years of borrowing to fund rapid growth.

The group was downgraded by two credit rating agencies last week while its shares tumbled below their 2009 listing price, as a battery of bad headlines and speculation of its imminent collapse ran out across Chinese social media.

On Monday anxious investors protested at the Shenzhen headquarters of the sprawling conglomerate, as Evergrande said it is facing “unprecedented difficulties” but denied rumours that it is about to go under.

But on Tuesday the company issued another statement to the Hong Kong stock exchange, saying it had hired financial advisers to explore “all feasible solutions” to ease its cash crunch and warned that there was no guarantee it would meet its financial obligations.

The firm blamed “ongoing negative media reports” for damaging sales in the pivotal September period, “thereby resulting in the continuous deterioration of cash collection by the Group which would in turn place tremendous pressure on the Group’s cashflow and liquidity”.

Shares in the firm fell nine per cent Tuesday, and are down almost 80 per cent since the start of the year.

An estimate by Capital Economics says that Evergrande has some 1.4 million properties that it has committed to complete — around 1.3 trillion yuan ($200 billion) in pre-sale liabilities, as of the end of June.

Its plight has raised fears of a contagion across the debt-laden Chinese property sector — which accounts for more than a quarter of the economy — with a knock on for banks and investors.

“Evergrande’s collapse would be the biggest test that China’s financial system has faced in years,” said Mark Williams, chief Asia economist at Capital economics.

Yet “markets don’t seem concerned about the potential for financial contagion at the moment,” he said, adding “that would change in the event of large-scale default”, which would likely prod the central bank to step in and buttress the teetering developer.

“The most likely endgame is now a managed restructuring in which other developers take over Evergrande’s uncompleted projects in exchange for a share of its land bank,” Williams said.

The pictures of angry investors outside the firm’s Shenzhen HQ could also cause alarm in Beijing, where leaders are keen to keep a lid on any form of social unrest.

Some creditors have demanded immediate payback of loans, Bloomberg News reported earlier this month.

Evergrande has already sold stakes in some of its wide-ranging assets and offered steep discounts to offload apartments, but still reported a 29 per cent slide in profit for the first half of the year.

It is also struggling to sell its Hong Kong headquarters, even at a loss.

The developer was founded in 1996 by Xu Jiayin, who went on to become China’s richest man during the country’s property boom of the 1990s.

He poured money into mass developments in new cities, raising $9 billion in its 2009 IPO in Hong Kong.

A year later Xu bought a struggling football team and renamed it Guangzhou Evergrande, lavishing millions of dollars on salaries for its stars and scooping titles.

Evergrande started to falter under the new “three red lines” imposed on developers in a state crackdown in August 2020 — forcing the group to offload properties at increasingly steep discounts.

— AFP

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China

Tragic stabbing of Japanese boy in Shenzhen sparks concerns over Sino-Japanese relations

A 10-year-old Japanese boy died after being stabbed in Shenzhen on 18 September, raising fears about strained Sino-Japanese relations. The attacker, a 44-year-old man, was apprehended. Japanese Prime Minister Fumio Kishida condemned the act, urging Beijing for swift information. This incident follows previous attacks on Japanese nationals, heightening concerns for their safety in China.

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CHINA: A 10-year-old boy, a dual citizen of Japan and China, succumbed to injuries after being stabbed while on his way to school in Shenzhen on Wednesday (18 September) morning.

The incident has raised alarms within the Japanese community in China and could further strain already tense Sino-Japanese relations.

According to the Chinese Foreign Ministry, the boy was attacked in the abdomen near a Japanese school and was transported to a hospital for emergency treatment.

Despite efforts to save him, he died of his wounds early Thursday.

The assailant, a 44-year-old man, was arrested by police near the scene.

The motivations behind the attack remain unclear, and it is uncertain whether the boy was specifically targeted due to his nationality.

A local Japanese businessman expressed concerns for the safety of the community, advising vigilance and caution when speaking Japanese in public spaces.

Japanese Prime Minister Fumio Kishida condemned the stabbing as an “extremely despicable crime” and called for prompt information sharing from Beijing regarding the investigation.

The Chinese Foreign Ministry, represented by spokesman Lin Jian, expressed condolences and emphasized the commitment to protecting foreign nationals in China.

Lin noted that such incidents could occur in any country and downplayed the potential impact on bilateral exchanges.

Eyewitness accounts described the chaotic scene, with the boy receiving immediate medical attention from passersby.

His mother was present during the attack.

This incident follows a similar knife attack in Suzhou in June, which left a Japanese mother and child injured.

In response to both attacks, Japanese officials have reiterated their demand for enhanced safety measures for their nationals in China.

Wednesday also marked the 93rd anniversary of a significant historical event—Japan’s bombing of a railroad track near Shenyang, which contributed to the Manchurian Incident and subsequent occupation of northeastern China during World War II.

In light of this, Japan had previously requested the Chinese government to bolster security at Japanese schools.

In mourning, Japan’s Ambassador to China, Kenji Kanasugi, ordered the national flag at the embassy to be flown at half-staff and planned to visit Shenzhen to meet the victim’s family.

The Japanese consulate in Guangzhou reported that local government officials had also extended their condolences.

Community responses in Shenzhen reflected a mix of shock and sorrow, with residents leaving flowers at the entrance of the Japanese school.

One local expressed shame over the incident as a Chinese national, while another voiced concern over the implications for Sino-Japanese relations.

As diplomatic tensions have already been heightened by issues such as espionage allegations against Japanese nationals and trade disputes, including a ban on Japanese seafood following the Fukushima disaster, this tragic event may exacerbate existing challenges.

The Japanese Chamber of Commerce and Industry in China has urged both governments to ensure the safety of Japanese citizens and seek clarity on the incident.

The investigation into the stabbing continues, with officials pledging to hold the perpetrator accountable under Chinese law.

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Animals

Panda knocks down zookeeper in Chongqing zoo, both unharmed

A panda named Ding Ding knocked down a zookeeper at Chongqing Zoo on 19 September, sparking concern after a video surfaced online. Both the caretaker and the panda were unharmed, and the zoo has continued normal operations.

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CHINA: On Thursday (19 September), a social media user shared a video showing a giant panda named Ding Ding (丁丁) knocking down a zookeeper at Chongqing Zoo.

In response to inquiries, zoo staff confirmed that both the zookeeper and the 9-year-old panda were unharmed and that Ding Ding continues to be exhibited as usual.

The video, circulated on Chinese social media platform Weibo, shows a zookeeper noticing that Ding Ding was attempting to escape through a partially open gate. The zookeeper rushed to close the gate, which produced a loud noise.

However, the gate wasn’t fully secured, and Ding Ding can be seen trying to open it again.

Visitors alerted the zookeeper, who rushed back to shut the gate.

This action seemingly agitated the panda, who then turned its attention toward the zookeeper.

During a brief chase, Ding Ding knocked down the zookeeper.

In the footage, some visitors can be heard advising others to stay calm and avoid shouting.

This is not the first such incident at the zoo.

In April 2024, another panda knocked over another zookeeper.

The zoo’s management reported that on 23 April, at around 2:00 PM, a zookeeper was guiding two pandas, Yu Ke (渝可) and Yu Ai (渝爱), to a feeding area when they chased and knocked the zookeeper down.

Fortunately, neither the zookeeper nor the pandas were injured.

Following that event, the zoo held a safety meeting and implemented stricter feeding protocols to prevent similar incidents.

Chongqing Zoo is home to 23 giant pandas.

According to Chongqing Daily, the panda enclosure, which has undergone three rounds of expansion and renovation, now covers nearly 20,000 square meters and is one of the earliest panda breeding centers in China.

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