A vehicle drives past unfinished residential buildings at Evergrande Oasis, a housing complex developed by Evergrande Group, in Luoyang, China, on September 16, 2021. Photo by Carlos Garcia Rawlins/Reuters.+
A house of cards is never a source of confidence to financial markets. But a house of cards built on shifting political sands is a signal for investors to head for the exits.
That’s exactly what’s been happening as markets take the measure of the teetering fortunes of real-estate conglomerate China Evergrande Group, one of China’s largest property developers with some 1,300 projects in 280 cities. Share prices have tumbled around the world in response to growing uncertainty about how Beijing will respond to the group’s imminent default on bonds issued in US dollars. Asia’s corporate bond markets have been shaken, and commodity prices have fallen amid worries that property development will slow in a Chinese economy where that sector represents about one-quarter of GDP.
Evergrande’s place in China’s house of cards – Atlantic Council
