Country Garden Warns of 'Severe' Tests in China Property Market

Bosses of Country Garden, China’s biggest private developer, have warned that the company could face “severe” challenges amid the weak property market this year.

The company, which defaulted on $11 billion of offshore bonds last October and extended repayments on onshore notes, is among dozens of developers facing a liquidity crunch under a government push to deleverage massive debts in the sector which began in mid-2021.

In an annual internal conference on Monday, chairperson Yang Huiyan said the market did not recover as expected last year and it was still in correction, according to the firm’s official Weibo account.

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“The challenges to be faced by the company this year may be more severe than we imagine; we have to respond calmly,” Country Garden President Mo Bin said.

Yang said she expected the market would “hover at a low level” in 2024, but the outlooks for different cities and between state-owned and private companies would increasingly diverge.

Focus on delivering 480,000 homes

Home delivery remains the top priority this year, the company said, expecting to deliver 480,000 homes to buyers, 20% less than the 600,000 units it delivered in 2023, the most in the country.

Yang said last March that the firm would close down all of its side businesses except contract construction – building projects for other companies – as well its construction robot business, as it sought to boost margins and lower costs.

Country Garden said on Monday so far it has commercialised 28 types of robots and has delivered 2,890 units to clients.

Its contract construction unit has built 30 developments worth 24.4 billion yuan and it was ranked number 11 in 2023 in the country in terms of constructed area.