More than 230 home developers filed for bankruptcy in China in 2023

INTERNATIONAL DESK: An estimated 233 home developers in China have registered for bankruptcy in 2023, Taiwan News reported citing the China Real Estate Association.

The highest number of bankruptcies have been filed in China’s Zhejiang province. As many as 36 cases of bankruptcy filed in Zhejiang accounted for 15.45 per cent of China’s total. Hunan and Guangdong provinces were second and third respectively in China, according to a Taiwan News report.

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According to the report, the number of bankruptcies for 2023 was the lowest since 2020. As many as 408 home developers filed for bankruptcy in 2020, the first year of the COVID-19 pandemic, Taiwan News reported. As many as 341 home developers filed for bankruptcy in 2021 and 308 registered for bankruptcy in 2022.

Home developers in third and fourth-tier cities suffered the most due to the economic downturn. China-based CRIC Securities’ research department has hinted that home sales in China continued to dwindle in 2023 and challenges would continue in 2024 despite favourable policies. Low consumer confidence and inventory overhang suggest that China’s housing market could remain sluggish for some time, according to Taiwan News report.

Earlier this month, some migrant workers, labour brokers and shop owners started moving out of the coastal cities and returning home as jobs in China’s coastal cities faced a reduction in job opportunities, the Voice of America (VOA) reported.

January in China is particularly a time when many migrant workers begin an annual trip home to celebrate the Lunar New Year, according to the VOA News report. However, this year, the massive exodus from coastal cities to provinces across the country began much earlier. Since China lifted the COVID-19 restrictions near the end of 2022, China’s economy has been struggling to stage a comeback. In a televised speech on December 31, Chinese President Xi Jinping acknowledged the challenges faced by China’s economy in 2023.

A worker, Ha Hailiang, who worked in China as a labour broker for the past seven years, said that before the COVID-19 pandemic, there were plenty of jobs in Shantou’s Chenghai district, home to many factories that manufacture toys. Now, orders and work have slowed dramatically in the city located north of Guangzhou and Shenzhen, VOA News reported.

“Business here in Shantou is particularly bad right now, and no factory has orders,” Ma said. “I initially brought 200 people to the factory, but they left for various reasons. Now, there are only 30 of them left. “Some left because they were working more than 12 hours a day. Others left because the factory had no orders and had to lay off workers, he said.

Shen Mei (37) returned to Henan’s Xinxiang City from Guangzhou late last month. She told VOA that she once could earn around USD 1,000 to 1,100 a month working in a factory, which is much more than she could earn in her hometown.

“We would work 12 hours a day and often have to work overtime. It is normal to work 14 hours a day. I work the night shift and eat my first meal at 11 pm,” she said.

Shen said that most young people in her hometown go to other cities to work, but it has been hard to find jobs nationwide as many factories have closed.

“The situation in China is particularly bad right now. Many people are gnashing their teeth against the government but dare not speak out. No one is happy except for those who work in government,” Shen Mei said, according to VOA News report. She said, “The miserable life of ordinary Chinese people is indescribable. It’s not an individual case. It’s how most people’s lives are.”

Ma Lijuan (38), a chef at a toy factory in Guangzhou, said she sees fewer workers in the canteen these days. She said that many workers who have worked in the factory for a long time had pay cuts this year. “My current income is half what it used to be before the pandemic,” she said. (ANI)