Another one bites the dust: A Chinese real estate developer is on the verge of bankruptcy, and is expected to default on millions in debt — the latest sign the government is willing to let some pawns fall as it moves toward a more market-oriented economy.
Zhejiang Xingrun Properties, based in China’s southeast coast, won’t be able to pay back 3.5 billion yuan ($565 million) in bank and other debts, according to state media. The company’s largest creditors include major state-owned banks, but government help doesn’t appear to be on the way. China’s central bank has denied reports that it was in emergency negotiations with the company, according to a statement on its official microblog.
Xingrun’s problems are coming to light less than two weeks after the country saw its first corporate bond default, a significant event as China has previously arranged last-minute rescues to save troubled companies. Premier Li Keqiang, one of China’s top leaders, suggested last week that more company defaults will be unavoidable going forward.
Li’s remarks came at the conclusion of China’s annual parliamentary meetings, when the government again pledged its intent to reform the economy.