Business
How the fall of Evergrande spells doom for China’s property market
The shares of China’s most indebted property giant Evergrande have been taken off the Hong Kong stock market, marking the end of its life as a publicly traded company that symbolised the rise and fall of China’s real estate industry.
Valued at more than $50 billion (£37.1bn) at its peak, Evergrande was China’s biggest property firm. But it became the poster-child for the problems facing Chinese developers after it collapsed under the weight of massive debts in 2021.
“Evergrande’s demise highlights that no private company in China is too big to fail,” Julian Evans-Pritchard, Head of China Economics at Capital Economics told The Independent.
“But the fact that it has taken this long for the company to be delisted underscores the slow-motion nature of China’s property adjustment, with state intervention preventing a more abrupt resolution.”
Evergrande’s 2021 default on offshore bonds led to its shares being suspended in January 2024, after a Hong Kong court ordered liquidation when years of restructuring talks failed.
Last week, the stock exchange confirmed it would cancel the listing because the firm failed to meet the requirement to resume trading within 18 months.
It comes as China’s economy is grappling with a series of challenges, including Trump’s tariffs, weak consumer spending, unemployment, high local government debt and an ageing population.
Experts say the collapse of the property sector has hit the country hardest, as it accounted for roughly a third of China’s economy and provided crucial revenue for local governments.
“It is a symbolic moment given that Evergrande was the first major casualty of China’s property downturn,” Mr Evans-Pritchard said. “The delisting itself won’t have a big impact given that the company’s market capitalisation had already collapsed and trading in the stock was suspended last year.”
“Although the company is being wound down, work on its projects is generally still ongoing, with local governments stepping in to make sure buyers eventually get the homes they bought.”
The company’s fall was as dramatic as its rise. Its founder, Hui Ka Yan, went from living a humble rural life to becoming one of Asia’s richest men.
Evergrande’s growth reflected the debt-fuelled nature of China’s property sector, which expanded rapidly following urbanisation and economic reforms in the 1990s.
Its 2009 listing marked a pivotal moment in that surge, with the company borrowing an unprecedented $20bn on international bond markets.
But the $45bn fortune that put Mr Hui at the top of the Forbes list of wealthiest men in Asia plummeted to less than $1bn.
By March 2024, Mr Hui was banned from China’s capital market for life over Evergrande’s overstating of its revenue by $78bn and he was fined $6.5m.
At the time of its collapse, Evergrande had an empire of 1,300 projects under development across 280 cities, an electric car business and Guangzhou FC. Earlier this year, China’s most successful team was itself kicked out of the football league due to debt.
Built on more than $300bn of borrowed money, Evergrande struggled to meet interest payments after Beijing introduced borrowing limits for developers in 2020.
Deep discounts on properties failed to prevent defaults on overseas debt, ultimately triggering liquidation.
The crisis wiped more than 99 percent from it stock market valuation.
Earlier this month, liquidators Alvarez & Marsal said they have so far recovered just $255m of assets, including a Claude Monet painting, out of the $45bn debt.
They also launched action against the firm’s auditors PwC China after authorities last March said it approved accounts despite inflated revenues in 2019 and 2020.
The housing crisis in China is far from over, with property firms like Country Garden still battling massive debt. Earlier this month China South City Holdings became the largest developer to be forced into liquidation since Evergrande.
“We think the property downturn is likely to continue for at least a couple more years, given that it will take time for the market to fully absorb excess supply as the backlog of unfinished projects are completed,” added Mr Evans-Pritchard.
Beijing launched a range of measures to revive the housing market and consumer spending, including incentives for new homeowners, stock market support, and purchases of electric cars and household goods.
Despite these efforts, China’s growth has slowed to around 5 percent, about half the rates seen in 2010.
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Budget 2026: FM Nirmala Sitharaman gives a strong push to manufacturing, infrastructure and job creation, while proposing a simpler tax and customs system.
Finance Minister Nirmala Sitharaman presents the Union Budget 2026-27.
Budget 2026 Takeaways: Finance Minister Nirmala Sitharaman on Sunday presented the Union Budget 2026-27, giving a strong push to manufacturing, infrastructure and job creation, proposing a simpler tax and customs regime, and hailing the government’s modernisation drive as a “reforms express”.
The Budget 2026 is anchored around three ‘kartavyas’ — driving growth by enhancing productivity and competitiveness, building people’s capacity, and ensuring inclusive development under the vision of Sabka Saath, Sabka Vikaas.
In her ninth consecutive Budget in Parliament, Sitharaman laid out a multi-pronged strategy to sustain growth amid global uncertainty, including expanding domestic electronics and semiconductor capabilities, de-risking infrastructure projects, skilling India’s youth for emerging technologies, and easing compliance for taxpayers and importers.
Here are the key takeaways from Budget 2026 across manufacturing, infrastructure, skills, AI, taxation and customs duty.
Manufacturing Gets A Boost
Budget 2026 put a special emphasis on the manufacturing landscape in India. The outlay for electronics components manufacturing was raised sharply to Rs 40,000 crore, while new schemes for rare earth magnets, chemical parks, container manufacturing and capital goods seek to reduce import dependency, and strengthen domestic supply chains. Textiles got an integrated, employment-oriented package covering fibres, clusters, skilling and sustainability.
Infrastructure-Led Growth
Infrastructure got a boost with a higher capex allocation and initiatives like a risk guarantee fund to de-risk projects for private developers, new dedicated freight corridors and national waterways, dedicated REITs (real estate investment trusts) for recycling of significant real estate assets of central public sector enterprises (CPSEs), and a seaplane VGF (viability gap funding) scheme.
The Centre’s capital expenditure (capex) target has been increased to Rs 12.2 lakh crore for FY27, up from Rs 11.2 lakh crore earmarked for the current financial year. Moreover, maintaining the fiscal discipline, Sitharaman said the government expects the fiscal deficit to be at 4.3 per cent of the GDP in 2026-27, lower than 4.4 per cent projected for the current financial year.
Tier-II and Tier-III cities were placed at the centre of urban growth via City Economic Regions, backed by reform-linked funding.
“We shall continue to focus on developing infrastructure in cities with over 5 lakh population (Tier II and Tier III), which have expanded to become growth centres,” Sitharaman said in her Budget Speech.
Greater Emphasis On Skilling
The Budget placed renewed emphasis on the services economy as a jobs engine. A high-powered Education-to-Employment and Enterprise Committee will realign skilling with market needs, including the impact of emerging technologies.
Content creation and creative industries get a boost through AVGC labs in schools and colleges, support for animation, gaming and comics, and new institutional capacity for design and hospitality. Tourism-linked skilling, from guides to digital heritage documentation, signals a clear intent to convert culture and content into employment and exports.
“I propose to support the Indian Institute of Creative Technologies, Mumbai in setting up AVGC Content Creator Labs in 15,000 secondary schools and 500 colleges,” FM Sitharaman said. AVGC stands for animation, visual effects, gaming and comics.
AI & Semiconductors Push
Artificial intelligence (AI) was positioned as a cross-sector force multiplier rather than a standalone theme. The Budget provided a push to artificial intelligence (AI) by promoting adoption with governance, agriculture, education and skilling, including proposals for AI-enabled advisory tools for farmers and AI integration in education curricula.
On hardware, the semiconductor strategy expanded decisively under ISM 2.0 (India Semiconductor Mission 2.0), with focus on domestic equipment manufacturing, materials, research centres and workforce development, signalling a long-term commitment to building a resilient chip ecosystem in India.
Taxation, ITR, TDS, TCS
A major structural reform comes with the Income Tax Act, 2025, effective April 1, 2026, containing simpler rules and redesigned forms.
Budget 2026 provided compliance relief for individuals, including extended timelines for revising returns to March 31 from December 31 earlier, staggered ITR due dates, and easier filing of Form 15G/15H through depositories.
Individuals with ITR-1 and ITR-2 returns will continue to file till July 31, and non-audit business cases or trusts are proposed to be allowed time till August 31, according to the Budget Speech 2026-27.
“I propose to extend time available for revising returns from 31st December to up to 31st March with the payment of a nominal fee. I also propose to stagger the timeline for filing of tax returns. Individuals with ITR 1 and ITR 2 returns will continue to file till 31st July and non-audit business cases or trusts are proposed to be allowed time till 31st August,” Sitharaman said.
TDS (Tax deducted at source) rules were clarified for manpower services, while a rule-based system for lower or nil TDS certificates is proposed. TCS rates were cut to 2% for overseas tour packages, education and medical expenses under liberalised remittance scheme (LRS). Litigation is targeted through integrated assessment and penalty orders, lower pre-deposit requirements, and wider immunity provisions.
TDS on the sale of immovable property by a non-resident will be deducted and deposited through resident buyer’s PAN (Permanent Account Number)-based challan instead of requiring TAN (Tax Deduction and Collection Account Number), Sitharaman said.
Customs Duty Tweaks
Customs duty rationalisation continued with a clear focus on domestic manufacturing, energy transition and ease of living. Exemptions have been extended or introduced for capital goods used in lithium-ion batteries, critical minerals processing, nuclear power projects and aircraft manufacturing.
Personal imports will become cheaper with a reduction in duty on goods for personal use from 20% to 10%. Seventeen cancer drugs and additional rare-disease treatments were exempted from customs duty. Process reforms aimed at trust-based, tech-driven clearances, faster cargo movement and lower compliance costs, especially for exporters and MSMEs (micro, small, medium and enterprises).
STT On F&O Hiked
The Budget increased securities transaction tax (STT) on futures trading from 0.02% to 0.05% and on options trading from 0.10% to 0.15%, a move that upset the capital markets with the BSE Sensex crashing more than 2,300 points from the day’s high and the NSE Nifty dropping to 24,571.75.
Securities Transaction Tax (STT) is a direct tax imposed on the buying and selling of securities in India.
Commenting on the Budget, Prime Minister Narendra Modi said, “The Union Budget reflects the aspirations of 140 crore Indians. It strengthens the reform journey and charts a clear roadmap for Viksit Bharat.”
February 01, 2026, 14:43 IST
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Shanghai (China): The Consulate General of India in Shanghai welcomed the resumption of Air India’s direct flight services between Shanghai and New Delhi, marking a major step forward in restoring people-to-people, business and institutional connectivity between India and China.
According to an official release, the inaugural Shanghai-New Delhi flight departed today from Shanghai Pudong International Airport, carrying over 230 passengers on board the Boeing 787 aircraft. The relaunch comes after a gap of nearly six years and represents a significant milestone in normalising bilateral air connectivity following the suspension of services in early 2020.
Speaking on the occasion, Consul General Pratik Mathur said, “The resumption of direct flights between Shanghai and New Delhi is a tangible expression of the renewed momentum in India-China engagement. Enhanced air connectivity is essential for facilitating trade, tourism, academic exchanges and people-to-people contacts, particularly between India and East China. We are pleased to see Air India restoring this important link.”
As per a release, Air India will operate the route four times a week using its Boeing 787-8 Dreamliner aircraft, featuring modernised cabins and enhanced onboard services. The restored service reflects the growing demand for travel between the two countries and the steady recovery of cross-border mobility. It will also support commercial, educational and cultural exchanges between India and the Yangtze River Delta region, one of China’s most economically dynamic clusters.
The Consulate General of India in Shanghai remains committed to supporting initiatives that strengthen connectivity and deepen cooperation across trade, investment, tourism, education and cultural exchange, the release stated.
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