In recent years, Huaxi Village’s financial situation has been unstable. Huaxi Group owes nearly 5.7 billion dollars (40 billion yuan) in debt. It faces the risk of bankruptcy.
According to the public financial report of Huaxi Group, as of the third quarter of 2018, the asset-liability ratio was 67.4%. In 2017, this ratio reached 67.83%. This shows that Huaxi Group’s debt pressure is enormous.
Recently, the debt risk of Huaxi Group has not been resolved but has intensified, or there is a risk of bankruptcy.
In addition, the three pillar industries of Huaxi Village, steel, textile, and tourism, are gradually declining. Steel prices dropped significantly. The textile industry suffers from an entire industry surplus. The number of tourists to Huaxi Village has also decreased considerably.
Starting from the 1980s, under the leadership of Wu Renbao , Huaxi Village claimed to be a collective economy. It achieved success and wealth. Huaxi Village is named the number one village in the world, with the highest density of rich people in China. It includes nearly 210 parent companies in various fields.
However, in fact, there have been doubts about Huaxi. Many say Huaxi has gained many conveniences due to the care policy. Huaxi Village is closed to foreigners and unable to attract outstanding talents from outside.
Some people say that Huaxi Village claims to be a collective economy, but in fact, it has been controlled by Wu Renbao’s family in all aspects.
Many people are concerned that as a banner of China’s rural collective economy, it is unknown how long Huaxi Village would last.