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Evergrande: Why should I care about the crisis-hit Chinese property giant?

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Evergrande: Why should I care about the crisis-hit Chinese property giant?


Peter Hoskins

Business reporter, BBC News

Getty Images People commute in front of the under-construction Guangzhou Evergrande football stadium in Guangzhou, China's southern Guangdong province on September 17, 2021. The photo shows a male motorcyclist with two passengers, children, seated behind him, as they ride past a large construction site.Getty Images

Before its debt crisis, Evergrande was building a new stadium for its football team, Guangzhou FC

What does Evergrande do?

Evergrande, formerly known as the Hengda Group, was founded by Mr Hui in 1996 in Guangzhou, southern China.

At the time of its collapse, Evergrande had some 1,300 projects under development in 280 cities across China.

The Evergrande Group as a whole encompassed far more than just real estate development.

Its businesses ranged from wealth management to making electric cars. It even owned a controlling stake in the country’s most successful football team, Guangzhou FC.

Mr Hui was once Asia’s richest person with his fortune estimated at $42.5bn (£31.6bn) by Forbes, but his wealth plummeted as Evergrande’s problems deepened.

Why is Evergrande in trouble?

Evergrande expanded aggressively to become one of China’s biggest companies by borrowing more than $300bn.

But in 2020, the Chinese government brought in new rules to control the amount owed by big real estate developers.

The new measures led Evergrande to offer its properties at major discounts to ensure money was coming in to keep the business afloat.

That meant the company struggled to meet the interest payments on its debts.

Since the start of the crisis Evergrande’s shares have lost more than 99% of their value.

In August 2023, the firm filed for bankruptcy in New York, in a bid to protect its US assets as it worked on a multi-billion dollar deal with creditors.

Why do Evergrande’s problems matter?

Evergrande’s problems and the property crisis as a whole have hurt the Chinese economy as the real estate industry accounted for about a third of the country’s gross domestic product (GDP), an annual measure of all economic activity.

It was not only a significant driver of growth but also a major source of revenue for local governments.

Getty Images Xi Jinping, China's president, arrives for a bilateral meeting in Peru in navy blue suit.  Getty Images

Xi Jinping has pivoted China’s economy towards high-tech manufacturing, ramping up competition with the US

A sharp fall in investment and fund raising activities in real estate have impacted the financial sector, and allied industries like construction, which are a huge source of employment.

At the grassroots level, it has hit ordinary people in China hard as many families put their savings into property.

All of this has helped put pressure on consumer spending, which Beijing sees as crucial to boosting economic growth.

Why didn’t Evergrande get a state bailout?

Through the property crisis the Chinese government has taken a number of measures to help shore up the industry and the economy.

Beijing has poured hundreds of billions of dollars into measures including the country’s central bank providing low-interest loans for state-controlled banks to support struggling real estate projects.

There has also been help for home buyers and incentives to purchase new household appliances.

But it did not roll direct bailouts for the country’s struggling developers, partly to avoid encouraging more risky behaviour.

While the property market was once crucial to China’s economic growth, President Xi Jinping’s focus has changed to competing with US to gain the lead in high-tech manufacturing and AI.

So the ruling Communist Party‘s economic priorities have shifted to areas like renewable energy, electric vehicles, automation and robotics.



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Serial rail fare evader faces jail over 112 unpaid tickets

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Serial rail fare evader faces jail over 112 unpaid tickets


One of Britain’s most prolific rail fare dodgers could face jail after admitting dozens of travel offences.

Charles Brohiri, 29, pleaded guilty to travelling without buying a ticket a total of 112 times over a two-year period, Westminster Magistrates’ Court heard.

He could be ordered to pay more than £18,000 in unpaid fares and legal costs, the court was told.

He will be sentenced next month.

District Judge Nina Tempia warned Brohiri “could face a custodial sentence because of the number of offences he has committed”.

He pleaded guilty to 76 offences on Thursday.

It came after he was convicted in his absence of 36 charges at a previous hearing.

During Thursday’s hearing, Judge Tempia dismissed a bid by Brohiri’s lawyers to have the 36 convictions overturned.

They had argued the prosecutions were unlawful because they had not been brought by a qualified legal professional.

But Judge Tempia rejected the argument, saying there had been “no abuse of this court’s process”.



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JSW Likely To Launch Jetour T2 SUV In India This Year: Reports

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JSW Likely To Launch Jetour T2 SUV In India This Year: Reports


JSW Jetour T2 Launch: JSW Motors Limited, the passenger vehicle arm of the JSW Group, is reportedly preparing to enter the Indian car market this year. It has partnered with Jetour, a China-based automotive brand owned by Chery Automobile, and the Jetour T2 SUV could be the company’s first product, according to the reports.

Media reports suggest that the launch will happen independently and not under the JSW MG Motor India joint venture. The SUV will wear a JSW badge and name, instead of the Jetour branding. The upcoming SUV will be assembled at JSW’s upcoming greenfield manufacturing facility in Chhatrapati Sambhaji Nagar, Maharashtra. 

According to the reports, the company plans to have the vehicle on sale by the third quarter of this year. With this move, JSW aims to establish itself as a standalone carmaker in India.

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Expected Powertrain

The SUV is likely to arrive with a 1.5-litre plug-in hybrid setup. Internationally, this hybrid powertrain is offered with both front-wheel drive and all-wheel drive options. It is still unclear which version will be introduced in India.

Design

In terms of design, the T2 is a large and rugged-looking SUV. It has a boxy and upright stance, similar to vehicles like the Land Rover Defender. Despite its tough appearance, it uses a monocoque chassis instead of a ladder-frame construction. 

Size

The SUV measures around 4.7 metres in length and nearly 2 metres in width. This makes it larger than the Tata Safari, even though it is a five-seater. A longer 7-seat version is also sold in some markets.

Price

Pricing details for India are yet to be announced. For reference, the front-wheel-drive five-seat T2 i-DM is priced at AED 1,44,000 (around Rs 35 lakh) in the UAE.

Jetour

Jetour is a brand owned by Chinese automaker Chery. Launched in 2018, it focuses mainly on SUVs and is present in markets across China, the Middle East, Africa, Southeast Asia and Latin America.



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John Swinney under fire over ‘smallest tax cut in history’ after Scottish Budget

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John Swinney under fire over ‘smallest tax cut in history’ after Scottish Budget



John Swinney has been pressed over whether this week’s Scottish Budget gives some workers the “smallest tax cut in history” – with Tory leader Russell Findlay branding the reduction “miserly” and “insulting”.

The Scottish Conservative leader challenged the First Minister after Tuesday’s Holyrood Budget effectively cut taxes for lower earners, by increasing the threshold for the basic and intermediate bands of income tax.

But Mr Findlay said that would leave workers at most £31.75 a year better off – saying this amounts to a saving of just £61p a week

“That wouldn’t even buy you a bag of peanuts,” the Scottish Tory leader said.

“John Swinney’s Budget might even have broken a world record, because a Scottish Government tax adviser says it ‘maybe the smallest tax cut in history’.”

Raising the “miserly cut” at First Minister’s Questions in the Scottish Parliament, Mr Findlay demanded to know if the SNP leader believed his “insulting tax cut will actually help Scotland’s struggling households”.

The attack came as the Tory accused the SNP government of increasing taxes on higher earners, with its freeze on higher income tax thresholds, which will pull more Scots into these brackets.

This is needed to pay for the “SNP’s out of control, unaffordable benefits bill”, the Conservative added.

Mr Findlay said: “The Scottish Conservatives will not back and cannot back a Budget that does nothing to help Scotland’s workers and businesses.

“It hammers people with higher taxes to fund a bloated benefits system.”

Hitting out at Labour – whose leader Anas Sarwar has already declared they will not block the government’s Budget – Mr Findlay said: “It is absolutely mind-blowing that Labour and other so-called opposition parties will let this SNP boorach of a budget pass.

“Don’t the people of Scotland deserve lower taxes, fairer benefits and a government focused on economic growth?”

Mr Swinney said the Budget “delivers on the priorities of the people of Scotland” by “strengthening our National Health Service and supporting people and businesses with the challenges of the cost of living”.

He insisted income tax decisions in the Budget would mean that in 2026-27 “55% of Scottish taxpayers are now expected to pay less income tax than if they lived in England”.

The First Minister went on to say that showed “the people of Scotland have a Government that is on their side”.

Referring to polls putting his party on course to win the Holyrood elections in May, the SNP leader added that “all the current indications show the people of Scotland want to have this Government here for the long term”.

Benefits funding is “keeping children out of poverty”, he told MSPs, adding the Budget contained a “range of measures” that would build on existing support.

The First Minister said: “What that is a demonstration of is a Government that is on the side of the people of Scotland and I am proud of the measures we set out in the Budget on Tuesday.”

Meanwhile he said the Tories wanted to make tax cuts that would cost £1 billion, with “not a scrap of detail about how that would be delivered”.

With the weekly leaders’ question time clash coming less than 48 hours after the draft 2026-27 Budget was unveiled, the First Minister also faced questions from Scottish Labour’s Anas Sarwar, who insisted that the proposals “lacks ambition for Scotland”.

Pressing his SNP rival, the Scottish Labour leader said: “While he brags about his £6 a year tax cut for the lowest paid, one million Scots including nurses, teachers and police officers face being forced to pay more.

“Even his own tax adviser says this is a political stunt. So why does John Swinney believe that someone earning £33,500 has the broadest shoulders and therefore should pay more tax in Scotland?”

Mr Swinney, however, said that many public sector workers would be better off in Scotland.

He told the Scottish Labour leader: “A band six nurse at the bottom of the scale will take home an additional £1,994 after tax compared to the same band in England.

“A qualified teacher at the bottom of the band will take home £6,365 more after tax in Scotland than the equivalent in England. There are the facts for Mr Sarwar.”



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