How parlous is its position – and theirs – was illustrated by the financial position of the electric-vehicle business put forward as one of the options for conversion of the proposed shorter-dated bonds. With $US9 billion of its own liabilities, the unit – which has produced only 900 vehicles to date – has said it will “face the risk of shutdown” if it can’t raise substantial new funding.

Evergrande itself needs up to $US44 billion of new funding over the next three years just to complete its stock of unfinished apartments. How much cash that could generate is uncertain, given that China’s developers operated with a pre-sales model, banking the cash from buyers before starting construction.

The treatment of the offshore bondholders – and the restructuring of other property companies’ debts have followed the same theme of buying time by stretching out bond maturities – contrasts with that of the developers’ onshore creditors, who have received some interest and principal and, where they have agreed to a restructuring, have been issued with bonds with far shorter maturities than their offshore counterparts.

It’s not surprising, in the circumstances, that the offshore market for China’s junk bonds, an important funding source for the property companies during the boom years, has essentially been closed to new issues.

Almost all the bigger Chinese developers that defaulted on more than $US30 billion of offshore bonds last year are still operating, even though sales by the top 100 developers plunged more than 40 per cent last year.

The country’s biggest developer, Country Garden, has said it expects to have lost between about $US800 million and $US1 billion last year. In 2021, it made a profit of about $US3.9 billion.

The challenge for Evergrande and its fellow developers is that Xi Jinping is sticking to his “property is for living, not for speculation” mantra.

China’s authorities have said they will provide liquidity support for “high quality” developers and that their priority is to get unfinished apartment complexes completed.

Apart from their support for developers’ funding and reduced interest rates on mortgages, they have also eased the “three red lines” policy – the restrictions on developers’ leverage introduced with little notice in August 2020 – that initially destabilised the developers.

China’s property sector does appear to have bottomed out, with sales of apartments edging up in the first few months of this year and prices stabilising. New investment in the sector, however, is continuing to fall. New floor space is down nearly 9 per cent so far this year compared with 2022.

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The challenge for Evergrande and its fellow developers is that President Xi Jinping is sticking to his “property is for living, not for speculation” mantra. That, and a population that is now shrinking, says that there will be no return to the boom years that created a large cohort of Chinese property billionaires.

Evergrande and the other distressed developers, however, need something akin to another boom if their bondholders and other creditors are to salvage anything meaningful from the wreckage within the new and extended time frames.

The restructuring seems to have a large strain of hope that something will emerge to transform Evergrande’s financials if the day of reckoning is deferred for a decade or more. Whether Evergrande survives beyond this year may well depend on whether it, and the bondholders who support the restructure, can convince the remaining investors to capitalise that hope.