Beijing's breaking up Evergrande "slowly" to stave off property collapse, International outrage over "missing" tennis star & Crippled US spy agencies pivot to China -- China Boss News 11.22.21
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Beijing's breaking up Evergrande "slowly" to stave off a property market collapse
Analysts at The Wall Street Journal report that Beijing is "dismantling” the deeply-troubled China Evergrande Group "slowly and behind the scenes” to avoid the risk of a property market collapse and contagion to other parts of the economy.
WSJ:
Under orders from Beijing, most of the 200 or so cities with Evergrande projects have set up task forces to help manage the process, people familiar with the matter say. Local authorities have been ordered to assemble accountants to examine Evergrande’s local finances, talk to other developers about completing unfinished projects, and set up law-enforcement teams to monitor any public discontent.
Emphasis added. The report cited unnamed sources who noted that while “[l]ooking out for foreign investors isn’t a priority,” Beijing was trying to stabilize the situation to keep “credit markets” healthy and do “worry about China’s image.” However, “making sure people get the properties they paid for” was described as a “central concern” for authorities.
WSJ:
Evergrande presold more than a million apartments that remain unfinished. If those units aren’t completed, many households could suffer painful losses, undermining confidence in the housing market. The industry accounts for roughly one-fourth of the country’s economic activity and the majority of household wealth.
Local authorities have required Evergrande to transfer revenues from unfinished homes to escrow accounts overseen by the government, according to notices reviewed by The Wall Street Journal and Chinese media.
Local governments are funneling some of that money to Evergrande’s suppliers so construction can continue, according to people familiar with the matter. Evergrande has had to submit applications to the government-managed accounts for the funds to be disbursed, one of the people said.
…In some places where projects weren’t as far along, local governments have urged Evergrande to scrap work entirely and return payments to home buyers, people familiar with the matter say. Local authorities are talking to other developers about taking over the land, they said.
…The company is sitting on many completed and unsold homes in different locations. It’s less clear what will happen with those.
It remains to be seen whether Beijing can, indeed, break up the over-leveraged real-estate titan without sending the greater economy into a tailspin.
WSJ:
While Beijing’s program looks well-organized in some cities, it appears to be moving slowly and haphazardly in others. Many suppliers say they’re still waiting for funds. …
But Chinese officials are confident that they can - at least when giving statements to the public.
Officials involved in Evergrande’s cleanup say they believe they have sufficient tools and experience to pull it off without seriously harming the property market, according to people familiar with the matter. They say Beijing has become more adept at managing private-sector meltdowns after handling others in recent years, including conglomerate HNA Group Co.
The risk for Beijing is in overestimating its ability to engineer outcomes in the economy, especially given Evergrande’s size.
The real-estate market is so entwined with China’s economy that any missteps could be dangerous. Home sales have fallen sharply recently, as buyers have become unnerved about the ability of many developers to stay afloat.
Falling land sales to developers are another concern, since such sales are a major source of public funds, accounting for more than 30% of local government revenue in 2020, according to financial-services firm Nomura.
For WSJ’s incredible “under-the-hood” look at Beijing’s efforts to stymie a debt crisis many believe is of its own making, China’s Plan to Manage Evergrande: Take It Apart, Slowly, click here.
Law and International Xi
International furor over “missing” Chinese tennis star
The disappearance of Chinese women's tennis champion Peng Shuai after she made #MeToo accusations against a former PRC Politburo member has resulted in an “international furor,” according to the New York Times.
The Women’s Tennis Association (W.T.A.) has called for an investigation into Peng's allegations of sexual assault against Zhang Gaoi, a former vice premier of China, and is threatening to pull its business out of China, while the governing body of men’s tennis and world champs Serena Williams, Naomi Osaka, Novak Djokovic and Roger Federer have all expressed their shock and concern. The United Nations has also called for an investigation with “full transparency,” and the White House is demanding “verifiable proof” of Ms. Peng’s whereabouts. On Friday, The New York Times’ Editorial Board published an op-ed questioning China’s “fitness to host” the 2022 Beijing Winter Olympics.
NYT:
After making the allegations in a Nov. 2 post on China’s popular Weibo social media platform, Ms. Peng vanished. Beijing’s disinformation machinery went into overdrive: Her charges disappeared from her social media account, and her name appeared to be blocked in searches. Foreign Ministry spokesmen insisted they were unaware of any sexual assault allegations, and questions and answers about Ms. Peng were omitted from official transcripts.
On Wednesday, Chinese state media published what it claimed was a screenshot of an email sent by Ms. Peng to the Women’s Tennis Association, saying that the allegations were untrue and “everything is fine.” This defies belief, and China must not be allowed to get away with it.
…In itself, Ms. Peng’s case is not about geopolitics or the Olympics. It’s about an athlete being disappeared for leveling a credible #MeToo accusation against a man who wielded significant power and, in her telling, exploited that power to demand sexual favors. Even on that level, it is hard to see how the I.O.C. can willingly close its eyes to the suppression of a world-ranked athlete as thousands of athletes from every corner of the world are about to descend on China.
Like so many victims of China’s repressive system, Ms. Peng has done nothing other than to seek redress for a wrong. Yet the very straightforwardness of her plight inevitably leads to fundamental questions about China’s fitness to host a global sporting event that purports to follow an Olympic ideal of building a better world through sport.
Jon Wertheim wrote another scathing indictment of the sports world’s business with China for Sports Illustrated:
We all have different thresholds for outrage. Companies and humans are good at holding their noses and rationalizing bad acts, especially when there’s money to be made. In tennis, though, we are at a different point. This isn’t just sweeping human-rights abuses and something systemically untroubling. This is a player—a longstanding, top-flight, well-liked veteran—caught in the gears and reportedly “missing.” How, in any kind of conscience—much less, good conscience—can the WTA continue engaging here? How can players who have global brands and have, admirably, used their platform to speak credibly about other forms of social justice, abide by this?
The WTA must ask itself a simple question: What does it stand for? What is its objective? If it’s simply to maximize revenues, it will stay in China, where a dozen events are held, more than in any other country. If the WTA has terms beyond the mercenary, it must demand transparency and action. And be prepared to get out, to stop doing business in a country so unaligned with its purported mission. Bravo to Steve Simon for stating as much, to The New York Times: “We would be prepared to take that step and not operate out business in China.” Now for the follow-through …
But the tirade that really resonated was this one from Jim Geraghty, senior political correspondent for the National Review:
Simon says the Chinese Tennis Association has told him that Peng is safe, and not under any physical threat in Beijing, but he wants to hear it from Peng herself.
There is very little reason to give the Chinese government the benefit of the doubt here. The Chinese government is not the laws-based force for stability and order that its cheerleaders in the West want to believe it is. The men who run China’s government are deeply corrupt brutes who enforce their will from the barrel of a gun and who are willing to harm anyone who gets in their way — even one of the country’s most successful and famous athletes. They see other people as objects to be used and discarded as they please. They are no more ethical or legitimate rulers than the mafia or drug cartels. They just have a worldwide propaganda effort to hide or downplay their crimes and celebrate them as poor boys who worked hard and rose to the top.
For NYT’s China Can’t Censor Away Growing Anger Over Athlete’s #MeToo Accusation, click here. For the NYT Editorial Board op-ed, Where Is Peng Shuai?, click here.
For Jon Wertheim’s call for action in Sports Illustrated, It's Time for the WTA to Stop Doing Business in China, click here.
For Geraghty’s essay in the National Review Another Reminder of China’s Corruption and Brutality: The Disappearance of Peng Shuai, click here.
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