(Bloomberg) — Protests intensified at China Evergrande Group’s offices across the country as the developer fell further behind on promises from more than 70,000 investors. Construction of unfinished properties with enough floor space to cover three-quarters of Manhattan has come to a halt, leaving more than a million homebuyers in limbo.
Fire sales sabotage an already volatile real estate market, squeezing other developers and rippling through a supply chain that accounts for more than a quarter of Chinese economic output. COVID-weary consumers hold back even more, and the risk of popular discontent rises during a politically sensitive transition period for President Xi Jinping. Credit-market tensions spread from low-rated property companies to stronger peers and banks. Global investors who bought $527 billion in Chinese stocks and bonds in the 15 months through June began selling.
While it is impossible to know for sure what will happen if Beijing allows Evergrande’s downward spiral to continue unabated, China watchers are playing out the worst-case scenario as they ponder how much pain the Communist Party can bear. ready to do. There is increasing pressure to intervene as the financial transition is increasing.
— david evans (@djevans71) September 16, 2021
China’s second largest real estate developer has just defaulted.
Debt exceeded $600B USD
Note: Lehman was liquidated for $600B, which was also owned by several international banks. Ripple effect is coming soon.
Trade: Short RMB because it is likely that China will devalue its currency to salvage the Evergrande. t.co/WNR6IGPPdH
— Ming Zhao (@FabiusMercurius) September 15, 2021
China’s markets are full of infection due to the sound of Evergrande. The property developer’s troubles add to an already softening housing market, which accounts for 28% of China’s economy. t.co/fmveJ3JUWK pic.twitter.com/8ByYzmhyC1
— Lisa Abramowicz (@lisaabramowicz1) September 16, 2021