Reader's question: Dubai World has refused to offload assets at fire-sale prices to repay obligations, forcing it to seek a debt standstill, a newspaper report on Sunday quoted an unnamed source at the government-controlled firm as saying Could you explain “fire-sale price”?

My comments:

A fire sale, as name suggests, is a sale that takes place after a fire. Goods surviving the fire may be damaged, burned or at least covered in soot. If the shop continues to sell them, you can imagine they may sell them at knocked down prices.

In the above example, Dubai World refused to offload assets because it feared that if it did, it could have sustained greater losses because buyers would have been seeking extremely low prices to take advantage of its debt problems.

It turns out to be a wise policy. Dubai, if you follow the news, was 4 billions dollars in debt and has now been bailed out by Abu Dhabi.

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本文仅代表作者本人观点，与本网立场无关。欢迎大家讨论学术问题，尊重他人，禁止人身攻击和发布一切违反国家现行法律法规的内容。

Zhang Xin has been with China Daily since 1988, when he graduated from Beijing Foreign Studies University. Write him at: zhangxin@chinadaily.com.cn, or raise a question for potential use in a future column.