For China's central bank governor, it seemed on Thursday, the long-awaited and feared by the international financial markets bankruptcy of Evergrande is already a foregone conclusion.

The second largest Chinese real estate developer, laden with a total of more than $ 300 billion in debt, announced last Friday that it would soon no longer be able to service its debt, said Yi Gang in a recorded video that was broadcast in a Hong Kong finance seminar.

The risks that Evergrande carries around are a "matter of the market" and are dealt with accordingly according to market economy and rule of law principles.

Hendrik Ankenbrand

Business correspondent for China based in Shanghai.

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Was that already the indirect confirmation that the scandal-shrouded group from Hong Kong's neighboring city of Shenzhen has come to an end and its foreign bondholders could now finally lose their bet on the company?

The American rating agency Fitch obviously sees it that way.

Shortly after the central bank governor's speech, she downgraded Evergrande to “restricted default” - one step before bankruptcy proceedings began.

Minutes earlier, the rating agency downgraded the Chinese competitor Kaisa to "restricted default", which comes 27th in the ranking of the largest real estate companies in China.

Lengthy structuring

Although the stock exchanges in Hong Kong and Shanghai did not react directly to the downgrade, according to market observers, the move by the rating agency is likely to mark the beginning of a protracted restructuring of Evergrande that could affect China's real estate sector Percent of the total output of the world's second largest economy is responsible.

On Monday, as expected, the company failed to make $ 82.5 million interest payments on overseas bonds.

After Evergrande did not make the payment by Wednesday, according to reports from news agencies and Fitch said he had not received a response from the company when asked, the rating agency confirmed the payment default after Yi Gang's speech.

The fact that the head of the central bank was so clear about the apparently imminent bankruptcy of Evergrande should reassure the markets, says Yan Yuejin from the Shanghai analysis house Real Estate Research Institute of the FAZ The signal to the industry is clear: The time when China's real estate companies are theirs Having financed rapid growth with the rapid taking on of large debts is over. Nobody could "evade" the debt reduction forced by the government in Beijing.

The holders of the dollar-nominated Evergrande bonds in the amount of 19.2 billion are unlikely to be reassured by such a prospect. According to Bloomberg calculations, Chinese borrowers have failed to service $ 10.2 billion in overseas debt since the beginning of the year, with companies in China's real estate industry accounting for well over a third of the total. In a restructuring of Evergrande, which could take months, if not years, the demands of foreign lenders should come last on the list of priorities in Beijing, suspect market observers. These would have to accept heavy discounts or the total loss of their stakes.

According to Central Bank Chairman Yi Gang's speech on Thursday, Beijing will now seem very unlikely to save the company.

At the beginning of the week, the central bank lowered the reserve requirements for banks by 0.5 percentage points.

The aim is to inject 1.2 trillion yuan (166 billion euros) of fresh capital into the economic cycle to cushion the effects of a crisis on the real estate market.

Central bank under pressure

According to a report in the "Wall Street Journal", the central bank, which has never been officially independent, has recently come under considerable pressure from the leadership of the Communist Party, headed by leader Xi Jinping, because of the lavish lending to real estate developers that it has long promoted.

Officials from the party's Central Disciplinary Commission have moved into the central bank to investigate whether the central bankers have acted “too buddy” with entrepreneurs like Evergrande founder Xu Jiayin.

The easing of monetary policy, which the central bank had previously rejected, should also be seen against this background.

In view of the slowdown in the economy, the government has now enforced this against the advice of the central bankers.