The disengagement of the banking circuit
Banks have long since turned their backs on Evergrande. Also in Hong Kong. HSBC and Standard Chartered, have refused to grant new loans to buyers of two yet-to-be-completed Evergrande residential projects.
Rating agencies have repeatedly downgraded the company due to its liquidity problems. The problems intensified when China last year introduced rules to calm loans to real developers, measures that limit debt in relation to a company’s cash flows, assets and capital levels.
Evergrande boasts over 1,300 real estate projects in over 280 Chinese cities. He is involved in nearly 2,800 projects in over 310 cities in China.
The company has seven different branches spanning various industries, including electric vehicles, healthcare, consumer products, video and television production units, and even a theme park. It has 200,000 employees, rising to 3.8 million in related industries.
Who risks more from the Evergrande crack
Banks, suppliers, homebuyers, and investors in the company’s stock and bonds experience hours of anguish. Evergrande herself has warned that the problems could get worse by creating larger, chain-linked defaults. Moreover, the possibility that a crisis in the banking sector could in turn be triggered by the default of Chinese real estate has been studied for a long time.