The impact of Evergrande Group’s bankruptcy would be significant, both in China and globally.

• China’s economy: It is a major player in China’s economy, and its collapse would have a ripple effect throughout the country. The real estate sector accounts for about 25% of China’s GDP, so a slowdown in the property market would have a major impact on economic growth. In addition,
• creditors include banks, insurance companies, and other financial institutions, so its collapse could lead to a financial crisis in China.
• Global financial markets: It is also a major player in global financial markets. It has issued bonds worth billions of dollars to investors around the world. If it defaults on its debts, it could cause a sell-off in global financial markets and disrupt the flow of capital.
• Homebuyers and businesses: Have built millions of homes in China, and many of these homes are still unfinished. If it goes bankrupt, these homebuyers could lose their deposits or be forced to move into unfinished homes. In addition, many businesses that do business with Evergrande could be affected by its collapse, as they could lose out on payments or be forced to lay off workers.

The full impact of bankruptcy is still unknown, but it is clear that it would be a major event with far-reaching consequences.

Specific impacts that have been reported so far:

• Homebuyers: Some homebuyers who have paid deposits for unfinished homes are now facing the possibility of losing their money. In some cases, It has stopped construction on these homes, and it is unclear when or if they will be completed.
• Businesses: Many businesses that do business with it are also being affected. Some suppliers have not been paid for their goods, and some construction workers have not been paid their wages. This is leading to job losses and financial difficulties for these businesses.
• Financial markets: The financial markets have also been affected by the crisis. The value of their bonds has fallen sharply, and there is concern that this could lead to a wider sell-off in the markets.
• China’s economy: The Chinese government is trying to contain the fallout from the crisis. However, the crisis is already having a negative impact on the economy, and it is unclear how long the government can keep it under control.

The full impact of the Evergrande crisis is still unfolding, but it is clear that it will be a major event with far-reaching consequences.

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Windmemories, CC BY-SA 4.0, via Wikimedia Commons