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China – Evergrande a Chinese real-estate company took 300 billion dollars worth of loan money promised to be payed back but used it to funned real-estate property construction. Evergrande is now 300 billion dollars in debt. And their having a hard time paying the money back, which caused a protest of people protesting at the Evergrande headquarters in Shenzhen, China. The riot caused police to be deployed but the people kept insisting their rightful money back from Evergrande. And hundreds of unfinished apartment buildings complexes which caused people who buyed the apartments to sue to Company.
How Evergrande Got in so Much Debt
Evergrande is the the second biggest Chinese real-estate giant which has 220 billion dollars in assets or 1.4 trillion yuan assets primarily which are land property and housing complexes. Over the years the Chinese government has created a crack down on reckless money borrowing, which put a stop to Evergrande’s empire by forcing it to sell some of its assets of its Empire which put it in a greater trouble. And Evergrande also is building new buildings with less demand for the apartments which is putting a slower economical output for China’s economy general over all. According to the Chinese National Institute of Finance and Development, a recognized major Beijing Think Tank. The Think Tank declared that the property boom has “shown signs of a turning point” while citing the weak demand the the slowing sales of apartment’s in China.
How and Why Evergrande is in serious Trouble
The Evergrande group has gotten itself in more trouble after building over 800 apartment complex’s which aren’t finished, which over 1.6 million people have bought to live in. This has caused Chinese people to riot and protest the Evergrande company to give back their money which was used wastefully to build over 800 unfinished buildings. This has caused evergrande to get over 300 billion dollars in debt, meaning if even evergrande gave all the properties and wealth to the people its indebted to it still has to pay an additional 80 billion dollars, or its simply has an 80 billion dollar or 517,280,000,000 yuan negative net wealth of all its assets. And in the 2008 crash all it took is one company assets to crash which made the Stock exchange and the entire economy of U.S to crash and Evergrande could cause the same out impact to happen to China’s economy and the U.S.