- Evergrande’s endless bankruptcy
- North Korea: China’s unwelcome partner
- Sinolytics Radar: more pillars for retirement planning
- EU and USA: pressure on China
- USA extends travel bans
- Lithuania’s China exports slump
- Chinese takeovers in Europe pick up again
- Shenyang under Covid lockdown
- Opinion: Lithuania, China and the new realities of global trade
North Korea’s dictator Kim Jong-un has conducted more missile tests this year than in the past five years combined. And it is only March. Beijing is upset about rockets fired at its border. Regardless, China still needs North Korea as a buffer between itself and US ally South Korea. It was only in late February that China’s leader, Xi Jinping, stressed the importance of bilateral cooperation with Pyongyang. A difficult diplomatic act, notes Christiane Kuehl. On closer inspection, the similarities to Russia are striking. Both North Korea and Russia are important partners against the West. Yet both act unpredictably. And now the international community also sees Russia, like North Korea, as an aggressor. This is why the back-and-forth of Chinese communication with its difficult allies seems so similar.
The liquidation of bankrupt Chinese real estate group Evergrande also remains an unprecedented balancing act. On Tuesday, the company reported that it will miss the March 31 deadline to submit its annual balance sheet. The balance sheet, once released, will reveal the extent of its financial woes, writes Finn Mayer-Kuckuk. The stalling tactics towards its creditors, which the company has kept up for months, are only possible because Chinese law does not acknowledge delayed bankruptcy. However, using intransparency as a strategy also has its limits. Questionable lending and the accompanying cover-up of problems already caused the end of Japan’s decade-long boom at the end of the 1980s.
Evergrande: bankruptcy drags on
What cannot be, is not spoken openly, either. Chinese real estate group Evergrande has been effectively bankrupt for months (China.Table reported). Yet no company representative and no Chinese official are even uttering the word “bankruptcy”, even though the criteria has been met long ago. But resulting turmoil on the financial market would simply be too great if news of the formal bankruptcy ran through all media channels. That’s why everyone involved is still trying to scrape by somehow.
However, warning signals are becoming unmistakable lately. On Tuesday, the company announced it would miss the deadline for presenting its annual financial statements on March 31. Money reportedly went missing from a key subsidiary. The company is now talking about “complications” in the preparation of the annual financial statements. In addition, creditors collectively demand about $1.8 billion in outstanding bond payments this week. Another reason for the delay in the publication of the financial statements is clear: The presentation of Evergrande’s numbers would have revealed the extent of its financial woes.
By refusing to provide an exact amount of its problems, Evergrande would have become liable to prosecution in Europe long ago. Elske Fehl-Weileder, a specialized lawyer at the law firm Schultze & Braun, has already explained China.Table the difference between China and the legal situation in most other large economies: Delaying bankruptcy is not a criminal offense in China.