每日跟讀#615: Chinese mega development teeters on brink of collapse

At the end of last month, police carried out a surprise raid at the head offices of Chinese property developer JC Group in Hangzhou, China, according to reports in international media. The company, whose offices have been sealed off by the authorities, is suspected of having carried out “illegal fundraising.” Thirty-two senior executives are believed to have been detained, while the whereabouts of the company’s founder and chairman Jay Wei is currently unknown. Furthermore, between August and October last year, JC Group slid into a payments crisis — the company still has 17 billion yuan (approx. US$2.5 billion) of outstanding liabilities on its books.

綜合外電報導，中國金誠集團因涉非法集資，其杭州的總部在四月底遭警方突襲檢查並封鎖，約三十二位高層遭拘留，傳集團創辦人兼董事長韋傑目前失聯。此外，金誠集團也在去年八月出現兌付危機，至去年十月，該集團未能兌付的金額超過一百七十億人民幣。

The above described problems may mean that the “charming towns” development project — a partnership between JC Group and local governments, which has attracted an estimated 3,800 individual investors — could be about to go bust. The scheme aims to build 59 “themed villages” across China, and local governments have already signed individual contracts worth up to a total of 570 billion yuan. Yucheng Town government in Zhejiang Province joined forces with JC Group, signing a deal with the company worth 10 billion yuan to turn itself into a one-stop marketplace for the adult entertainment industry called “Happy Town.”

上述問題恐讓金誠集團所主導、和地方政府合作並有約三千八百位投資者投資的「金誠特色小鎮」計畫泡湯，該計畫預計在中國全國範圍內，開發五十九個「特色小鎮」，和地方政府簽約的項目量規模達五千七百億人民幣。以浙江省于城鎮為例，當地政府和金誠集團合作，預計將該城建設為成人情趣產業的一條龍市場，其建設要價約一百億元人民幣。

However, JC Group is reported to have used China’s shadow banking system to raise funds for the project, while promising investors annual returns of up to 12 percent. With a minimum investment amount of 100 million yuan, total losses sustained by investors may be to the tune of 38 billion yuan.

金誠集團則透過影子銀行籌集「特色小鎮」資金，並承諾投資人高達百分之十二的年回報率，而投資「特色小鎮」計畫的最低金額為一百萬元人民幣，若拿不回資金，投資者恐損失約三百八十億人民幣。

Chinese media has also revealed that a large number of JC Group’s development projects have either not been formally initiated or construction work has yet to begin. Further, in April last year, China’s regulatory authorities discovered that the company was engaging in misleading advertising and required the group to temporarily suspend its fundraising operations. Then in August, the company began to postpone payments relating to the projects.

然而，金誠集團被中媒踢爆，其多數開發項目未正式立項或動工，監管機構也在去年四月發現該集團誇大宣傳，要求金誠集團整改並暫停基金銷售業務。金誠集團則在去年八月，出現延期兌付狀況。

According to the South China Morning Post, the JC Group case shows the significant risks posed by China’s state-led, debt-driven model of economic development. Additionally, collaboration between local governments and private companies through public-private partnership (PPP) arrangements have increasingly become a tool for local governments to hide debt.

《南華早報》指出，金誠集團的案例，展現了中國以債務、國家主導做為經濟動力的巨大風險，地方政府和私人公司合作的PPP模式也變相成為地方政府隱藏隱性債務的手段。

Source article: http://www.taipeitimes.com/News/lang/archives/2019/05/07/2003714664