New | Here’s why Evergrande’s pursuit of Vanke failed: politics
An Evergrande-Vanke merger, backed by Baoneng, will create a mega developer that’s too big for Beijing to ignore, or trust
The control of China Vanke, the country’s largest property developer, has always been a political matter, not economic or business. So it was too, with the spectacular failure of China Evergrande and Baoneng Group in their pursuit of Vanke.
Over the last two weeks, mainland regulators have not only named and shamed Evergrande and Baoneng, but also sent in investigators to study their insurance units. All these have forced their sale of insurance products – a major source of funding - into almost a halt.
The pair were brought to their knees.
Evergrande announced on state TV that it no longer had any plan to gain control of Vanke. In less than 24 hours, Vanke said it no longer needed a white knight to help it fend off the barbarians at its gates.
Evergrande has only itself to blame, though not for its “bad boy” behaviour suggested by the insurance regulator. That’s nothing but just an excuse.
