In addition to Evergrande's real estate projects, asset products of Evergrande's Wealth Management were deemed a safe investment. Many bank consultants recommended them to retail investors. What will happen to their investments now, and how will they react to the constant stream of bad news? Beijing is taking its time with a final decision.
By Ning Wang
Yuen Yuen Ang is a professor of Chinese economics at the University of Michigan. As an author, she focuses on the global implications of China's rise. Ang also looks at the problems posed by China's rapid industrialization and explains why arbitrary decrees from Beijing's political leadership stand in the way of the country's global rise.
By Redaktion Table
China's government is cracking down on the real estate market in an effort to contain soaring prices. The measures are intended to support people in search of affordable housing, but they are also increasingly becoming a problem for China's real estate giants.
By Redaktion Table
The impending Evergrande bankruptcy is a major stress test for China's financial system. But the impact on the country's real estate and financial system will remain manageable. There is no risk of a collapse or even a global financial crisis. But the case ruthlessly exposes the weaknesses of the Chinese economy.
By Frank Sieren
The bankruptcy of the Chinese real estate developer Evergrande gripped international stock markets in 2021. Protests by desperate Evergrande investors and rescue attempts through e-mobility investments as well as China’s "three red lines" policy followed suit. Read all the important and latest news on China’s Evergrande from the China.Table editorial team.
Evergrande is one of the largest property developers in China. It is currently also the most indebted real estate group in the world. In the fall of 2021, Evergrande was no longer able to come up for its hundreds of billions of dollars in debt. The crisis posed an immense challenge to the Chinese financial and real estate system.
The real estate sector accounts for more than a quarter of China's economic growth. Seventy percent of the wealth of Chinese households lies in real estate. A collapse of the sector could thus lead to sentiments from the public. To counteract the collapse of the Chinese real estate market and the unrest within the population, the Chinese leadership introduced "three red lines" even before Evergrande’s bankruptcy. In addition, Evergrande also invested in the electric mobility sector with Evergrande's subsidiary Evergrande New Energy Vehicle (NEV).
The Evergrande crisis is far from being solved in 2022. After the insolvency announcement and rescue attempts using the subsidiary Evergrande New Energy Vehicle in the field of electric mobility, domestic investors seem to slowly breathe a sigh of relief. Furthermore, the government tried to ease the worries on the real estate market by lowering interest rates at the end of 2021.
