Evergrande collapse could spur nationalisation of Chinese real estate

Chinese president Xi Jinping is said to be pressing ahead with structural reforms to the country’s property markets, even as Evergrande teeters on the brink of collapse. Analysts and government advisers expect him to take advantage of what he has termed a “window of opportunity” to reduce financial risks, especially in heavily indebted sectors such as real estate. Officials are thought to be more willing to take risks with Evergrande, which has missed payments to both retail investors and bondholders, as property sales are on track to hit 1.8bn sq m, up from the annual average of 1.7bn sq m. But one government adviser warned that even more drastic measures could come. “Fire sales of Evergrande’s land reserves could drive down land prices in many areas of the country, which would be quite frightening,” the adviser said. In that case, he added, “The only viable solution might be to gradually nationalise the whole real estate sector.” The FT (£)