by Dominique Dewitte
published on Saturday, February 3, 2024 at 6:03 PM •
3 min read
In summary. Chinese real estate conglomerate Evergrande, with a debt of $300 billion, has been ordered into liquidation by a Hong Kong court. This raises questions about the consequences for both China and the global economy.
Why is this important?
Evergrande’s demise is a symptom of a deepening financial crisis in China that has been going on for years. The collapse of the real estate market and construction sector has eroded economic confidence in China, leading to unemployment and challenges for local governments. This also affects the global market, as China’s dependence on exports becomes apparent in a cooling global economy.
In the news. Evergrande will not trigger a financial crisis in China, but rather is the result of an already existing financial crisis.
- Up to 30% of the Chinese economy depended on an inflated real estate bubble, with negative consequences for both formal and shadow banking.
- The crisis has led to a more realistic view of foreign investors on the risks in China. Many have already taken their money out. All this emphasizes the dependence v
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2024-02-03 23:36:15
#Chinese #economy #close #implosion
