The crisis that is engulfing China’s real estate sector continues to worsen, and as a result, Asia’s wealthiest woman has seen her fortune decrease by more than half in the past year, according to a billionaire index that was published on Thursday.
According to the Bloomberg Billionaires Index, Yang Huiyan, a majority shareholder in China’s largest property developer Country Garden, saw her net worth drop by more than 52 percent, from $23.7 billion the previous year to $11.3 billion today. This represents a significant decrease from the previous year’s value of $23.7 billion.
In a sign that the crisis is spreading to builders that were previously considered rock stable, Yang’s fortune took a serious hit on Wednesday when the Guangdong-based company Country Garden’s Hong Kong-listed shares fell 15 percent after the company announced that it could sell new shares to raise money. This is an indication that the crisis is spreading to builders that were previously considered rock stable.
According to official media, Yang came into her riches when her father, Yang Guoqiang, who founded Country Garden, handed his shares to her in 2005. Yang’s grandfather also contributed to her wealth.
Two years later, following the initial public offering of the developer’s shares in Hong Kong, she rose to prominence as the wealthiest woman in all of Asia.
But at this point, she is on the verge of losing that title to Fan Hongwei, a billionaire in the chemical fibres industry who had a market value of $11.2 billion on Thursday. She is barely clinging to it.
The Chinese government began cracking down on excessive debt in the real estate market in the year 2020, which caused major players in the market, such as Evergrande and Sunac, to struggle to make ends meet and forced them to renegotiate with collectors as they teetered on the brink of filing for bankruptcy.
Buyers all over the country are starting to withhold their mortgage payments for houses that were sold before they were completely finished because they are furious about the slowing construction and delayed deliveries of their properties.
Even though Country Garden has been relatively unaffected by the recent market turmoil, the company managed to spook investors with an announcement made on Wednesday that it intended to raise more than $343 million through the sale of its shares, in part to pay off debts.
According to a submission that Country Garden made to the Hong Kong inventory trade, the company stated that the proceeds from the sale could be used for “refinancing existing offshore indebtedness, general working capital, and future development purposes.”
As analysts and policymakers in China become increasingly concerned about the spread of monetary contagion, China’s banking regulator has urged lenders to assist the property sector and meet the “reasonable financing needs” of companies.
It is estimated that the real estate market is responsible for 18-30 percent of the nation’s GDP. Furthermore, the real estate market is a significant factor in the growth of the world’s second-largest financial system.
Following the publication of depressing Q2 growth figures that were the worst since the beginning of the COVID-19 pandemic, analysts have issued a warning that the industry is currently mired in a “vicious cycle” that will further dampen consumer confidence. This comes after the release of the dismal Q2 growth figures.