What is Evergrande? The Chinese property giant behind global sell-off fears
Evergrande Group built a real estate empire on a mountain of debt. Now the Chinese property giant is in trouble — and there are fears it might take the global economy down with it.
HONG KONG — Evergrande Group built a real estate empire on a mountain of debt. Now the Chinese property giant is in trouble — and there are fears it might take the global economy down with it.
The uncertainty fueled a market sell-off this week and has raised concerns of a crisis similar to the one set off in 2008 by the collapse of the U.S. investment bank Lehman Brothers. Experts say such comparisons are overblown, not least because the Chinese government exerts a much greater degree of control over even private companies like Evergrande.
But the developer’s predicament could deal a serious blow to the world’s second-biggest economy as Beijing faces what may be one of its largest defaults.
The cash-strapped Evergrande has sold millions of apartments to China’s growing middle class since being founded in 1996 by billionaire Xu Jiayin, 62, once China’s richest man. The company, based in the southern hub Shenzhen, says it has more than 200,000 employees, as well as some 1,300 projects in more than 280 Chinese cities.
For years, the model worked.
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