Evergrande's Property Boom Turns to Financial Crisis: What's Next for China?
The downfall of China Evergrande, a real estate giant that defaulted on $300 billion of debt, was not solely due to Chinese lending policies, but also questionable accounting and poor corporate oversight. Evergrande had lost $81 billion over the prior two years, and records requested from the company were incomplete, with important accounting errors or misstatements potentially going undetected. The company promised apartments to hundreds of thousands of home buyers that were never built, took in billions of dollars that have vanished, and accumulated unpaid bills of $140 billion. Evergrande's collapse has led to a cascade of defaults among other developers, leaving a landscape of boarded-up construction sites and angry stakeholders. The company remains in default and its future remains uncertain.