It would not be a surprise if the “news” turned out to be true. How could that happen? And how would this sudden change affect international investors, including those from Taiwan who have high expectations of enviable investment returns in China?Ī case study of the rise and fall of Evergrande might shed light on the real danger for international investors behind the trumpeted China opportunities.Ī few weeks ago, the suicide of the founder and chairman of Evergrande became big news in China’s internet community. In parallel, China’s own economic engines began to lose steam rapidly, and warning sirens started to go off increasingly frequently in its financial sector.Ĭhina seems to have transformed itself from a land of success to a minefield overnight. The US-Sino trade war initially triggered this change, then accelerated by the rising tension between China and other major developed countries. Things started to change gradually in the second half of Trump’s administration. As a result, a cumulative $1.6 trillion foreign capital has been poured into China as foreign direct investment (FDI) since the 1980s, when China decided to open up its domestic market to the outside world. In the past forty years, China has been perceived by countless corporates and individuals as the largest gold mine in modern history: cheap land and raw materials, insatiable appetite for goods, lax regulations, and above all, its favourable policies handed out to foreign investors. What would follow in 2023 and beyond? Is Taiwan prepared? The Evergrande trouble was shocking, but it was only the tip of a monstrous China iceberg, toward which the Titanic of international investors are headed. In late 2021, international investors felt a real chill from China: China’s real estate giant, China Evergrande Group, defaulted on interest payments on US$1.2B offshore bonds. Image credit: Residential buildings developed by Evergrande in Yuanyang by Windmemories/ Wikimedia Commons, license: CC BY-SA 4.0.
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