The once ambitious Country Garden has now encountered many setbacks in overseas markets. Ten years ago, Country Garden began to expand in the Asia-Pacific market, investing in Malaysia, Thailand, Indonesia and Australia. However, these overseas projects did not bring profits, but instead added trouble to Country Garden, which was already strapped for funds.

Recently, Country Garden is negotiating to sell the remaining interests in the Wilton Greens project in Sydney, Australia to Chinese developer Avantaus for 1.13 billion yuan. In addition, Country Garden also used land and properties in Thailand as collateral for two bonds of approximately 155 million yuan. The biggest dilemma for Country Garden is Forest City, a super project in Malaysia. Policy changes and the impact of the COVID-19 epidemic have put the project in a dilemma.

Country Garden’s failure in overseas expansion was mainly due to excessive expansion, misjudgment of the situation, and the impact of the epidemic on the global economy. At the same time, real estate in the mainland has declined, and the government has strictly controlled developer lending, causing real estate companies to face capital chain problems. Under this circumstance, Country Garden really has no funds to promote the development of Forest City.

Market critics believe that Country Garden and other real estate companies have expanded blindly over the past many years, failed to do a good job in risk management, and developed with high leverage, so they are heavily in debt. However, this business model was the norm in the Chinese real estate market at that time. Now, facing the adjustment of the real estate market, companies need to reintegrate. The transition process will be painful, but it will be healthier for future development.