The Truth About Evergrande

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by Chris Black

– During the year 2022/2023, China will participate in 28.4% of global growth, compared to only 8.5% for the US. (France has 1.3%)

– What happens in China will have 3 times more impact in the world than what happens in the US.

-The Evergrande crisis is a debt crisis (as with subprime).

-The real estate sector represents 20% of Chinese GDP. By comparison, in 2006 (pre-crisis) real estate represented 7% of US GDP.

– China’s property market is clearly in a bubble, and it looks like it is bursting.

-Evergrande is said to be around 300 billion in debt and its stock has already lost over 80%.

– This debt involves over 128 banks, so defaults are a systemic risk.

– According to senior Chinese officials, this bubble could threaten Chinese finance and its economy as a whole.

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