As concerns over the financial health of a state-owned conglomerate rattled China’s bond market over the past week, analysts said its challenges reflected the lasting toll of the country’s prolonged property crisis, with local governments struggling to find sustainable alternatives beyond real estate to support their economies.
At the centre of the storm is Zhuhai Huafa Group, the largest local government-owned enterprise in Zhuhai in southern China’s Guangdong province. While property development remains its core business, the conglomerate also has interests spanning technology, urban operations and financial services.
With more than 93 per cent of its equity owned by Zhuhai’s State-owned Assets Supervision and Administration Commission and the remainder held by Guangdong’s finance department, Huafa was deeply intertwined with the city’s development, including projects such as the Hengqin New Area, analysts said.