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Can a Green-Economy Boom Town Be Built to Last? – The New York Times

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NORMAL, Ill. — When he bought a construction contractor called Weber Electric in 2018, Josh Mosier inherited about 20 employees. By the end of the next year, he was up to about 100 employees. By the spring of 2021, the number was over 225.

“Because of this boom,” said Mr. Mosier, whose company often works on large building projects, “we’ve grown exponentially.”

The epicenter of that boom is an electric-vehicle maker named Rivian, which brought in Mr. Mosier’s company and others in the Normal, Ill., area to work on the city’s costliest construction project in decades: a massive auto plant.

As it prepares to deliver its first electric pickup trucks and sport utility vehicles this year, Rivian has spent around $1.5 billion renovating and expanding a factory once owned by Mitsubishi. On a typical day the 3.3-million-square-foot plant hosts several hundred construction workers alongside more than 2,500 workers employed by the company, which expects to eventually double its local head count.

The effects are hard to miss in Normal and nearby Bloomington, a metropolitan area of about 170,000. Hotels are frequently booked up, pandemic or not; hundreds of housing lots are being developed; and many employers looking to hire a full-time plumber are basically out of luck.

“At Rivian, we’ve heard they’re hiring a lot of licensed plumbers,” said Lori Stickling, who operates a plumbing company with her husband. “We’ve had a post up for months with no qualified candidates.”

In recent years, makers of electric vehicles and their components, like Tesla, Lucid Motors and Lordstown Motors, have collectively spent billions building or renovating factories in Nevada, Texas, Arizona and Ohio.

The challenges are enormous, given that few of these companies have brought a vehicle to market. But if some succeed, the impact could be many times greater than the thousands of manufacturing jobs they create directly.

They could transform places like Normal, a university town where high-paying blue-collar employment lagged until the late 1980s, when Mitsubishi partnered with Chrysler to build a factory. The plant, which employed over 3,000 at its peak, and its suppliers attracted workers from across central Illinois. The resulting economic activity helped fill the city’s coffers and fund redevelopment.

When the plant scaled back production in the 2000s and closed in 2015, around the time of white-collar job cuts, Normal felt the pinch. Suppliers decamped, and many workers left in search of new jobs. Uptown, an elegant, brick-accented district with a restored 1930s theater and a pair of suddenly too-big hotels, became a monument to the city’s fading prosperity.

Local politicians and business leaders embraced Rivian, which is based in Michigan and has locations in other states, Canada and Britain, as a way to fill the vacuum. But in a place that has endured such changes of fortune, residents can be forgiven for wondering how long today’s good times will continue.

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Electric vehicles require fewer workers to make than gasoline-powered ones. And while Rivian’s prospects appear strong — it filed for a public stock offering in August, seeking a valuation of roughly $70 billion — the company could be overwhelmed by a growing list of competitors. At some point, the spending spree will end, and the local industry will rise or fall on whether Rivian can build a sizable customer base.

The initial froth is already dissipating. After reaching more than 200 employees earlier this year, Weber Electric is down to about 100. “We kind of rolled it back a little bit,” said Mr. Mosier, the owner, adding that he hopes to add workers again as the plant green-lights more construction.

In this way, the electric vehicle boom is something of a microcosm for the larger transition to a low-carbon economy: As governments and investors funnel hundreds of billions of dollars into green industries, there is certain to be an initial jolt. But will it last?

Not everyone in Normal has a connection to the Rivian plant, the company’s only production facility; it just feels that way sometimes. Sitting in a lobby at the plant one afternoon in June, Katy Tilley, who helps oversee workplace operations like site design and dining, said her younger sibling, who had just left the Marine Corps, was starting at the company the next week.

“My younger brother works in the battery department!” her colleague Laura Ewan, a community relations employee, chimed in. “We were so different, our parents would have never expected us to work in the same place.”

Hiring began in 2016, when Rivian kept on a handful of former Mitsubishi employees who had been maintaining the shuttered factory, but it has accelerated in the last year and a half. The company hired about 100 people a week in June and July.

The ramp-up has made labor, already in short supply during the pandemic, even more scarce. A branch of the International Brotherhood of Electrical Workers, which has helped contractors like Mr. Mosier staff up, says it has fully booked the roughly 280 licensed union electricians in the area.

To meet the demand, the union brought in a few hundred electricians from elsewhere in the country this year.

A nearby community college started a program this fall to train electric vehicle technicians, and Illinois State University, which abuts Uptown, is building an engineering school partly in response to Rivian.

Rivian brought in Josh Mosier’s company to work on the city’s costliest construction project in decades: a huge auto plant.

The boom has also sustained the local travel and hospitality business. Last October, after a four-year hiatus, Delta Air Lines resumed a nonstop flight to Detroit.

The visitors, including contractors, suppliers and Rivian employees from other locations, have helped keep the city’s restaurants and hotels afloat during the pandemic. “It’s really saved their bacon,” Mayor Chris Koos said. One indication of their reliance on Rivian: The company runs a shuttle service to and from a stop near the hotels from 6 a.m. to 8 p.m.

In principle, a factory like Rivian’s should provide a more lasting boost than a solar or wind farm, which creates a flurry of construction activity but requires relatively few employees to operate. An automobile factory could also provide a bigger stimulus than an e-commerce warehouse because its workers tend to be more productive and can therefore be more highly paid.

Such factories also attract more suppliers, said Willy C. Shih, an expert on manufacturing at the Harvard Business School.

Despite this potential, new factories don’t benefit all cities equally. When a factory opens where much of the population is already employed, the net gain to the local economy can be muted, according to research by Timothy J. Bartik, an economist at the W.E. Upjohn Institute for Employment Research in Michigan.

But in an area like Normal that is suffering industrial decline, a factory’s effect on employment can be up to three times as great. The benefits can last for decades — if the factory survives.

“When the employment-population ratio is going up, it drives up earnings, and that goes on for 20 years,” Mr. Bartik said.

In 2010, about 65 percent of working-age people in the Bloomington-Normal area were employed, according to the Census Bureau, far higher than the national average of 57 percent. By the eve of the pandemic, however, the local employment rate had fallen just below the national average, which had recovered to about 60 percent.

One contributor to the decline was the shuttering of the Mitsubishi plant, originally known as Diamond-Star Motors. The 2015 announcement blindsided workers, some of whom were hired only weeks before, and took a financial toll on veteran production workers, whose hourly pay had once been in the upper $20s.

The closing also wiped out suppliers and squeezed local restaurants and retailers. “We had restaurants close by,” said Bob Dobski, who owned several McDonald’s franchises in the area. “We definitely saw diminished traffic.”

Around the same time, State Farm, whose headquarters is in Bloomington, was shrinking its local work force. The real estate market wilted.

In 2016, an auction company was preparing to sell the Mitsubishi plant in pieces. After executives from Rivian came to scout equipment, the company’s 38-year-old founder, an M.I.T. Ph.D. named R.J. Scaringe, decided that the plant itself was the real find. “It was like, ‘How much for the whole thing?’” Mr. Scaringe recalled.

The company barely had a website, much less a product. When it asked for tax subsidies before it completed the $16 million purchase, local government officials were not entirely convinced that the company was for real.

“We gave them a list of things we need,” said Mark Peterson, then the city manager. The list included such rudiments as the names of board members and a photo of a prototype. The company responded to roughly half the requests, Mr. Peterson recalled. (Both he and the company said Mr. Scaringe later provided more information at a Town Council meeting.)

The city and other local authorities approved a package of tax abatements and grants worth up to $4 million in any case, realizing it had no other option for reviving the plant, but the skepticism lingered.

In 2019, however, the company raised nearly $3 billion from the likes of Ford Motor and Amazon, which also ordered 100,000 electric delivery trucks. That fall, Rivian held a public curtain raiser in Normal for its $70,000 trucks, which it says can accelerate to 60 miles per hour in about three seconds.

“To a lot of people in the community, it was the first solid touch they’d had with Rivian,” said Mr. Koos, the mayor. “There was a lot of excitement.”

Workers at the nonunion plant start at $20 an hour and top out at $23 after three years — less than what veteran workers earn at unionized plants owned by General Motors and Ford, but more than the typical wage in the Bloomington-Normal area, where most of the new hires have come from.

“I was about to start sending out applications,” said Becky Skeen, a longtime Mitsubishi employee facing limbo before Rivian hired her in 2017. “I was really grateful.”

For the local economy, the suppliers attracted by Rivian may be as important, part of a virtuous cycle that can pull in workers from the margins of the labor force.

A few could end up at a recently revived industrial park near the Rivian plant. More than a decade ago, a civil construction firm called Stark Excavating took over an unfinished 500,000-square-foot structure there after the developer ran into financial problems.

But last year, Stark Excavating sold the building to a real estate investment firm, which finished construction and leased it to Rivian, then began work on a second 500,000-square-foot building that could be used by suppliers or Rivian itself.

“That’s all attributable to Rivian — they’re driving this town,” said David Stark, Stark’s president. “It reminds me of when Diamond-Star Motors built that original car plant that was taken over by Mitsubishi. It’s what made Bloomington-Normal grow.”

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Opinion | Do We Need to Shrink the Economy to Stop Climate Change? – The New York Times

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This article is part of the Debatable newsletter. You can sign up here to receive it on Tuesdays and Thursdays.

If there is a dominant paradigm for how politicians and economists today think about solving climate change, it is called green growth. According to green growth orthodoxy — whose adherents populate European governments, the Organization for Economic Co-operation and Development, the World Bank and the White House — the global economy can both continue growing and defuse the threat of a warming planet through rapid, market-led environmental action and technological innovation.

But in recent years, a rival paradigm has been gaining ground: degrowth. In the view of degrowthers, humanity simply does not have the capacity to phase out fossil fuels and meet the ever-growing demand of rich economies. At this late hour, consumption itself has to be curtailed.

Degrowth is still a relatively marginal tendency in climate politics, but it’s been attracting converts. In 2019, more than 11,000 scientists signed an open letter calling for a “shift from G.D.P. growth” toward “sustaining ecosystems and improving human well-being.” And in May, a paper published in the journal Nature argued that degrowth “should be as widely and thoroughly considered and debated as are comparably risky technology-driven pathways.”

Here’s a closer look at the debate.

Perhaps the most prominent proponent of the degrowth movement is Jason Hickel, an economic anthropologist and the author of “Less Is More: How Degrowth Will Save the World.” Degrowth, as he defines it, “is a planned reduction of energy and resource use designed to bring the economy back into balance with the living world in a way that reduces inequality and improves human well-being.”

His argument against the green growth framework rests on two key premises:

  • There is no historical evidence that G.D.P. can be completely decoupled from material resource use. In other words, human economies cannot grow infinitely on a planet with finite resources.

  • G.D.P. can be decoupled from greenhouse gas emissions by replacing fossil fuels with renewable energy, but that decoupling isn’t happening fast enough.

The requisite solution, in Hickel’s view, is to reduce resource and energy consumption, which will make it easier to rapidly transition to renewable energy in the short time humanity has left to avert 1.5 degrees of global warming. But this imperative would not apply equally across the globe:

  • Climate change is being driven primarily by the cumulative historical consumption of the Global North, so he argues it is incumbent on rich countries to shrink their economies. (The disproportionate responsibility advanced economies bear for climate change is also why Hickel rejects calls for population control in poorer countries as “completely backward”: “We do have a population problem, it’s true,” he said in 2018. “But it has nothing to do with poor countries. The real problem is that there are too many rich people.”)

  • That retrenchment, in turn, would create space in the global carbon budget for poorer countries to continue growing, which they still need to do to lift their populations out of poverty.

Critics of degrowth have analogized the project to economic austerity or forced recessions, which tend to cause broad-based suffering and worsen inequality. But those negative effects, Hickel says, are merely the predictable disaster that ensues “when growth-dependent economies stop growing.”

Degrowth, by contrast, calls for a different kind of economy altogether, one that could improve people’s livelihoods despite a reduction in aggregate activity: It seeks to scale down “ecologically destructive and socially less necessary production” (such as S.U.V.s, weapons, beef, private transportation, advertising and consumer technologies that are designed to obsolesce) while expanding “socially important sectors” like health care and education.

Among the policies Hickel proposes to create such an economy are shortening the workweek, introducing a job guarantee with a living wage, shifting workers out of declining industries and the decommodification of goods like housing that people need to live dignified lives.

In a recent newsletter, the economist Noah Smith took degrowth’s main arguments to task in a defense of green growth:

  • First, he says economic growth can, in fact, be decoupled from resource use: “We can keep raising everyone’s standard of living without exhausting the planet’s resources. Because growth doesn’t just mean using more and more stuff; instead, it can mean finding more efficient ways to use the stuff we have.” (Hickel dismisses the claim as a hypothetical.)

  • Second, and more directly pertinent to climate change, Smith says that decoupling G.D.P. from greenhouse gas emissions is not just possible, as many degrowthers acknowledge, but already happening: Since 2005, 32 countries, including the United States, have managed to do it, according to the Breakthrough Institute.

Smith agrees with Hickel, though, that emissions decoupling isn’t happening fast enough. The question, then, is whether degrowthers offer the correct prescription for reaching carbon neutrality on a shorter timetable.

My colleague Ezra Klein doesn’t think so. The unacceptably slow pace of the transition to renewable energy, he argued on a recent podcast, is a political problem, not a technological one. And on the politics, degrowth is a much tougher sell than green growth.

The degrowth movement is “attacking the flaws of the current strategy as not moving fast enough when the impediments are political, but then not accepting the impediments to its own political path forward,” he said. “I think that if the political demand of the movement becomes you don’t get to eat beef, you will set climate politics back so far, so fast, it would be disastrous. Same thing with S.U.V.s. I don’t like S.U.V.s. I don’t drive one. But if you are telling people in rich countries that the climate movement is for them not having the cars they want to have, you are just going to lose.”

This is an argument Hickel takes seriously:

New York magazine’s Eric Levitz agrees that “Americans might well find themselves happier and more secure in an ultra-low-carbon communal economy in which individual car ownership is heavily restricted, and housing, health care, and myriad low-carbon leisure activities are social rights.” But, he adds, “nothing short of an absolute dictatorship could affect such a transformation at the necessary speed. And the specter of eco-Bolshevism does not haunt the Global North. Humanity is going to find a way to get rich sustainably, or die trying.”

At the moment, degrowth has no mass constituency. But some of its animating ideas are nonetheless exerting an influence on political economic thought — particularly the critique of G.D.P. growth as the lodestar of human progress.

“Even within mainstream economics, the growth orthodoxy is being challenged, and not merely because of a heightened awareness of environmental perils,” John Cassidy wrote in The New Yorker last year. “After a century in which G.D.P. per person has gone up more than sixfold in the United States, a vigorous debate has arisen about the feasibility and wisdom of creating and consuming ever more stuff, year after year.”

What’s the alternative? Kate Raworth, an English economist, has identified one option: “doughnut economics.” In Raworth’s view, 21st-century economies should abandon growth for growth’s sake and make it their goal to reach the sweet spot — or the doughnut — between the “social foundation,” where everyone has what they need to live a good life, and the “environmental ceiling.”

“The doughnut model doesn’t proscribe all economic growth or development,” Ciara Nugent explains in Time. “But that economic growth needs to be viewed as a means to reach social goals within ecological limits, she says, and not as an indicator of success in itself, or a goal for rich countries.”

Raworth’s ideas have had real-world impact: Last year, during the first wave of the pandemic, Amsterdam’s city government announced it would aim to recover from the crisis by adopting the precepts of “doughnut economics.” A year before that, Prime Minister Jacinda Ardern of New Zealand announced her country would prioritize its residents’ welfare and happiness over G.D.P. growth.

Even in the United States, which has embraced no such policy, G.D.P. growth has slowed in the past two decades, largely because of falling birthrates and a switch in spending patterns from goods to services.

That hasn’t solved the problem of America’s addiction to fossil fuels, of course. “Yet the sorts of policies on offer from degrowth advocates — like universal basic services and shorter working hours — could help address some of the long-standing ills now afflicting a wide range of economies,” Kate Aronoff writes in The New Republic. “Rather than chasing an increasingly far-off goal by trying to coax forth elusive corporate investment with giveaways, governments could start planning for what a fairer lower growth, lower carbon future might look like.”

Do you have a point of view we missed? Email us at debatable@nytimes.com. Please note your name, age and location in your response, which may be included in the next newsletter.


“Why Degrowth Is the Worst Idea on the Planet” [Wired]

“Can we live within environmental limits and still reduce poverty?” [Development Policy Review]

“Can we save the planet by shrinking the economy?” [Vox]

“Green growth vs degrowth: are we missing the point?” [OpenDemocracy]

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Guinean Business Leaders Pledge to Support Economy Despite Coup – BNN

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(Bloomberg) — An association of banks, insurance companies and microfinance institutions operating in Guinea pledged on Saturday to support the West African nation’s economy following the Sept. 5 military coup that overthrew President Alpha Conde.

“We are servants of the Republic, that is why we solemnly wish to reiterate our commitment to support and finance all economic players and in an inclusive way,” said Guy Laurent Fondjo, head of the Business Science Institute, at a meeting with the leader of the junta Colonel Mamady Doumbouya.

The meeting was part of national consultations started by the military group that began on Sept. 14 aimed at achieving an inclusive transition in the country. Doumbouya earlier urged the lenders to facilitate access to credit to help revive economic activity.

“We are committed to continuing our work of supporting the Guinean economy for the well-being of Guineans and for the sustainable development of our dear country,” said Fondjo, who is also chief executive officer of Afriland First Bank Guinea.

©2021 Bloomberg L.P.

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Teetering property developer Evergrande sparks contagion fears for China's economy – CBC.ca

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Property developer China Evergrande Group is teetering on the brink of collapse, weighed down by a giant debt load and billions of dollars of real estate it can’t sell as quickly or as profitably as anticipated.

While trouble has been brewing for a year, it’s coming to a head now, as the conglomerate missed one loan payment in June and more are expected. The company’s offices were the site of angry protests this week, and things could get even uglier on Monday when the company is likely to miss another key interest payment to its increasingly concerned financiers.

Evergrande’s possible collapse is sparking fears that it could take other parts of China’s housing market down with it — and impact business interests outside China, too.

Here’s a brief explainer of what you need to know about the story.

What is Evergrande?

Founded in 1996 in the Chinese city of Shenzhen, across the border from Hong Kong, Evergrande is mostly a property developer, whose core business is buying up land and turning it into residential real estate. Company founder Hui Ka Yan is a former steel worker who rode China’s 21st century real estate boom to a fortune that was at one point last year worth $30 billion US, good enough for the title of third-richest man in China. 

The company has built more than 1,300 housing developments in 280 cities in China, with plans for another 3,000 projects underway in various cities across the country.

But like any good conglomerate, it has expanded into all sort of other businesses, including bottled water and food, electric vehicles, theme parks, a Netflix-like streaming service with almost 40 million customers — and even a professional soccer team.

Why are they in trouble?

Debt — and lots of it. The company has almost two trillion yuan of debt on its books, the equivalent of more than $300 billion US. The company aggressively borrowed money to buy more land to develop, and sold apartments quickly at low margins to raise enough cash to start the cycle up again. Which works fine as a business model — until it doesn’t.

In late 2020, new rules brought more scrutiny to the company’s finances, which revealed higher-than-expected debt loads. That, coupled with mounting construction delays spooked buyers, setting up a vicious cycle. The company began its descent to pariah status as lenders and buyers lost their nerve in lockstep with each other.

Every attempt by the company since then to distract from its problems only served to draw more attention to them. Lenders got more and more unsettled. Existing owners got upset. New sales slowed, which created a feedback loop that got lenders even more jittery.

WATCH | Investors angrily protest at Evergrande offices:

Chinese real estate jitters

18 hours ago

Buyers at Chinese property developer Evergrande are demanding answers from the company management, as fears mount that the company may collapse under its debt load. (David Kirton/Reuters) 0:34

In June, the company admitted it missed payment on a loan. The next month, a Chinese court froze a $20 million bank deposit at the request of one its lenders. At least one creditor, a paint supplier, is reportedly being paid in apartments that won’t be ready until 2024.

According to data compiled by Bloomberg, on the 19th of July, presales at two projects in Hunan were halted. Three days later, Hong Kong banks stopped offering mortgages on any incomplete projects by the company in the city. On August 9, two more projects in Kunming stopped construction due to missed payments, followed by similar halts at projects in Nanjing and Chengdu. Things have snowballed ever since. The company’s stock price has cratered by 90 per cent in the past year, and most of their bonds are in junk status.

The company is behind on its obligations to more than 70,000 investors. More than one million buyers of unfinished projects are in limbo. And the pace of problems is picking up. “Sales could slump further as the developer may struggle to restore potential homebuyers’ confidence,” said Lisa Zhou, an analyst with Bloomberg Intelligence.

Monday figures to be an inflection point for the company as Evergrande is supposed to make an $80 million interest payment on one of its many loans, and there’s next to no chance it will pay that, which could start the clock ticking toward some undesirable outcomes.

So what could happen?

A number of bleak B words are on the table — bankruptcy, breakup, buyout, or bailout — and none of them are ideal.

The first option would be the most painful. 

“If, as expected, Evergrande is defaulting on its debt and goes through a restructuring, I don’t see why it would be contained,” Michel Lowy of distressed debt investment firm SC Lowy, told Reuters.

The Emerald Bay residential project in Hong Kong has been beset by delays, and spooked buyers. ( Lam Yik/Bloomberg)

But because of the Chinese government’s long-standing desire for stability, that’s also the least likely outcome. The company owes money to 128 different banks, and was behind almost one out of every 20 property sales in China in the past five years. Evergrande permanently employs almost 200,000 people, but hires almost four million people a year to work on various projects.

With a reach that wide, analysts who cover the sector are confident that Beijing won’t let the company simply collapse. “Evergrande’s escalating crisis may prompt government action to prevent social instability,” Zhou said.

More likely is some version of the next two options, a breakup or buyout, where the company sells assets to raise cash and help is brought in to run things. “State-owned enterprises or other developers may also take over Evergrande’s projects, after Chinese officials sent accounting and legal experts to examine the company’s finances,” Zhou said.

A full government bailout, however, is just as unlikely. China has been cracking down on its high-flying technology sector, trying to regulate and ban cryptocurrencies and reining in excesses in all sorts of sectors. Evergrande’s problems may be a test case in Beijing’s desire and ability to manage every facet of the growing economy.

A man walks past a banner promoting the Emerald Bay residential project in Hong Kong, amid news that the developer is teetering on the brink of collapse. (Lam Yik/Bloomberg)

Economist Art Woo with Bank of Montreal said in a note on Friday that he also doubts a bailout is coming. “As for who could bear the losses, that’s frankly tricky to predict, but we think it’s reasonable to believe that the authorities are unlikely to bail out equity holders or creditors in an effort to prevent moral hazard from increasing and improve financial discipline,” he said.

More likely is some sort of organized wind down, to keep damage to a minimum. “We do not believe the government has an incentive to bail out Evergrande (which is a private-owned enterprise),” Nomura analyst Iris Chen said in a note to clients.

“But they will also not actively push Evergrande down and will supervise a more orderly default, if any, in our view.”

WATCH | CBC reported on China’s ‘ghost cities’ of empty towers nearly a decade ago:

China’s ghost cities

9 years ago

CBC’s Adrienne Arsenault explains how empty skyscrapers are casting shadows on the Canadian economy. 2:31

Is there an impact outside China?

Not much, directly, although the company does have assets in Europe and North America — including the ritzy Château Montebello resort in Quebec — but the company’s woes are nonetheless a cautionary tale for people everywhere.

China has been in a housing boom for more than two decades now, as more and more people put money into residential real estate — almost regardless of the price and demand for the underlying asset.

Video went viral on social media this month of a 15-tower condo development in Kunming being dynamited to the ground because it was a ghost city with no actual residents, eight years after being built.

While that wasn’t an Evergrande project, the worry is that there are many others out there like it.

China’s Lehman Brothers moment?

The 2009 financial crisis was sparked by the failure of two investment banks, Bear Stearns and then Lehman Brothers, which exposed just how much bad debt there was in the system, and caused a chain reaction of worry down the line 

That may be far fetched for the economy as a whole this time around, but it’s certainly on the table for China’s housing market at least.

“Lehman (was) very different as it went across the financial system, freezing activity,” said Patrick Perret-Green, an independent London-based analyst.

“Millions of contracts with multiple counterparties, everyone was trying to work out their exposure,” he said. “With Evergrande it depresses the entire real estate sector.”

“There are other developers that are suffering from the same problem of no access to liquidity and have extended themselves too much,” Lowy said.

Simon MacAdam, an economist with Capital Economics, says the Lehman parables are unwarranted.

“The China’s Lehman moment narrative is wide of the mark,” he said. “Even if it were the first of many property developers to go bust in China, we suspect it would take a policy misstep for this to cause a sharp slowdown in its economy.”

Regardless, the Evergrande saga is a cautionary tale about the down side of unrestrained real estate speculation anywhere.

As Woo put it: “A default or bankruptcy does not pose a Lehman-type threat … but it’s still bad news for the economy.”

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