that is now synonymous with the onset of the Great Recession, though many economists have cautioned against panic and directly equating the two episodes. Still, there is a reason the embattled Chinese firm has become a household name on Main Street over the past few days, and Wall Street remains on high alert over what comes next as a repayment deadline looms on Thursday.A family walks by a map showing Evergrande development projects in China at an Evergrande city plaza in Beijing, Sept.
Evergrande's real estate arm owns more than 1,300 projects in more than 280 cities in China, according to its website. Evergrande Group says it employs 200,000 people total and its projects create more than 3.8 million jobs per year -- leading some to suggest it has"too big to fail" status. The firm states it has some $350 billion in assets.Essentially, Evergrande's rapid growth has been fueled in large part by borrowing.
"When the apartments are selling well that's not a problem for them, but anytime that apartment sales slow down, the company could run into trouble to meet its debt obligation and that's what we are seeing now," Wei said. "Clearly people who invest in the company understand the company was undergoing financial difficulty and there's a chance that they couldn't meet their obligations," Wei said. Recent policy changes in China to rein in the housing market -- as well as corporate debt -- have also led to Evergrande's woes culminating in recent days.
S&P Global stated in its report that it does not expect"government actions to help Evergrande unless systemic stability is at risk." If this restructuring plan works, Wu writes that they expect the implications for overall economic policy and outlook to"remain contained," though the property sector will likely remain tense for some time and some spillover into the wider financial sector is likely.A vehicle drives past unfinished residential buildings at Evergrande Oasis, a housing complex developed by Evergrande Group, in Luoyang, China Sept. 16, 2021.
It's the reputation of China and the moneies of various foreign banks at stake. China govt will play it's role to save it's reputation and to retain easy flow of credit in the economy. Though not many would trust China but I guess this time Chinese govt is going to intervene.
F China.
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