China’s real estate giant Country Garden is deeply mired in a debt crisis, with the group’s chairman, Yang Huiyan, recently calling for “selling the pot and selling iron to guarantee home delivery,” attracting attention.
According to reports from The Paper, on May 9, Country Garden Group held its monthly management meeting, emphasizing that ensuring home delivery is the company’s top priority. It is reported that recently, the controlling shareholder of Country Garden Holdings pledged all of the shares of Country Garden Services it holds as collateral and borrowed 1 billion yuan specifically for domestic home delivery work.
In terms of asset disposal, on April 25, Country Garden sold an 11.063% stake in Blue Arrow Aerospace for a price of 1.305 billion yuan. After the transaction is completed, Country Garden will no longer hold any equity in Blue Arrow Aerospace. This transaction is expected to generate approximately 370 million yuan in pre-tax cumulative income, with the funds intended for project construction related to home delivery and general operations.
Reports state that during an internal meeting, Country Garden’s chairman Yang Huiyan stated that selling the pot and selling iron to ensure home delivery would quickly restore the company’s normal operations. She expressed confidence in the company’s ability to resume normal operations.
Debt restructuring is a key issue that Country Garden must resolve in order to restore its operations. As of the end of 2024, Country Garden’s total borrowing was approximately 253.5 billion yuan, with about 42% of the debt being overseas.
In October 2023, Country Garden announced hiring financial advisors to carry out debt restructuring, but progress has been slow. It wasn’t until January of this year that key terms of the overseas debt restructuring were announced, involving debts amounting to 16.4 billion US dollars, with Country Garden envisioning a maximum debt reduction of 11.6 billion US dollars.
On the domestic debt front, Country Garden is following the lead of other real estate companies in debt reduction. According to mainland media reports in April, Country Garden adjusted the repayment plans for nine of its bonds, involving a principal amount of about 13.517 billion yuan. This move aims to buy more time for negotiating debt reduction plans with creditors.
Country Garden acknowledges that both its operational and financing sides are under pressure, with cash resources severely limited, making it currently unable to raise sufficient cash resources for public bond payments.
Against the backdrop of significantly reduced sales revenue, there is concern about whether Country Garden can raise the funds needed to achieve its home delivery targets.
In the first quarter of 2025, Country Garden achieved equity contract sales amounting to 77.7 billion yuan, a 42.49% year-on-year decrease, reflecting weak market demand and the current market predicament.
Furthermore, Country Garden recorded a loss of 32.8 billion yuan in 2024.
Country Garden calling for “selling the pot and selling iron to guarantee home delivery” has drawn attention. The phrase “selling the pot and selling iron” began appearing frequently in government work reports or documents in many parts of China last year, mainly used in asset disposal and local debt risk resolution by local governments, indicating selling idle assets, including land, buildings, and inefficient local state-owned enterprises. The term originated from the “Great Leap Forward” period when Mao Zedong was in power. During that time, Mao Zedong proposed achieving an annual steel production of 10.7 million tons through “massive steel production.” The nation was engulfed in a frenzy of “selling the pot and selling iron” and “backyard furnaces,” and within half a year, regional famines began to spread nationwide.
Former CCP official Du Wen stated that the term “selling the pot and selling iron” carries a strong sense of crisis in the Chinese context, seemingly indicating a last resort when resources are depleted.
Country Garden’s predicament reflects the current widespread challenges facing the Chinese real estate industry.
According to the China Index Research Institute’s release of the “2025 Q1-Q3 China Real Estate Company Sales Performance Rankings,” in the first three months of 2025, the total sales of the top 100 real estate companies decreased by 9.8% year-on-year. In March, the monthly sales of the top 100 real estate companies decreased by 10.6% compared to the previous year.