{"id":50068,"date":"2023-08-18T10:14:15","date_gmt":"2023-08-18T14:14:15","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/evergrande-files-for-u-s-bankruptcy-as-china-crisis-deepens-the-next-risks\/"},"modified":"2023-08-18T10:14:18","modified_gmt":"2023-08-18T14:14:18","slug":"evergrande-files-for-u-s-bankruptcy-as-china-crisis-deepens-the-next-risks","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=50068","title":{"rendered":"Evergrande Files for U.S. Bankruptcy as China Crisis Deepens. The Next Risks."},"content":{"rendered":"<div id=\"js-article__body\" itemprop=\"articleBody\" data-sbid=\"WP-BAR-0000723411\">\n<div data-layout=\"wrap\n              \" data-layout-mobile=\"\" class=\"\n        media-object\n        type-InsetMediaIllustration\n          wrap\n  article__inset\n        article__inset--type-InsetMediaIllustration\n          article__inset--wrap\n    article__inset--lead\n  \"><\/p>\n<p>        <!-- eventually when we know what this card will be we can change it and leave this one --><\/p>\n<figure class=\"\n        media-object-image\n        enlarge-image\n        img-wrap\n        article__inset__image\n      \" itemscope=\"\" itemtype=\"http:\/\/schema.org\/ImageObject\"><\/p>\n<\/figure><\/div>\n<p>\n        Evergrande<br \/>\n       has filed for bankruptcy protection in the U.S. nearly two years after its descent into distress triggered a crisis across China\u2019s property sector. More risks, beyond developers, are brewing in the world\u2019s second-largest economy.<\/p>\n<p>Evergrande filed for Chapter 15 bankruptcy protection in Manhattan on Thursday \u2013 a symbol of China\u2019s sprawling and indebted real estate industry\u2014which some estimates have put at 30% of the country\u2019s gross domestic product (GDP). Chapter 15 protects foreign companies like Evergrande, whose corporate debt was widely held among Western institutional investors, under the umbrella of U.S. bankruptcy law.<\/p>\n<div class=\"paywall\">\n<p>Evergrande\u2019s meltdown, beginning in September 2021 when it failed to make interest payments on bonds, rocked global markets and set off a chain of failures across the Chinese property sector. Evergrande in July reported an 812 billion Chinese yuan ($111.4 billion) loss for 2021 and 2022, and the company\u2019s restructuring, largely state stage-managed, has been long in the works.<\/p>\n<p>\u201cThe Company noted relevant reports of the media and wishes to clarify that the Company is pushing forward its offshore debt restructuring as planned,\u201d Evergrande\u2019s board said in a statement. \u201cThe application is a normal procedure for the offshore debt restructuring and does not involve bankruptcy petition.\u201d<\/p>\n<p>Evergrande\u2019s filing for U.S. bankruptcy protection is not a shock, but comes at a time when investors globally are stressed about the debt crisis in China\u2019s real estate sector. Trouble at property giants\u2014including, most recently, the largest survivor,<br \/>\n        Country Garden<br \/>\n       (ticker: 2007.H.K.)\u2014threatens to spill into the wider financial system and comes when the world\u2019s second-largest economy is already in the midst of a slowdown.<\/p>\n<p>Country Garden last week missed interest payments on some corporate debt, warned of huge losses, and halted trading on a spate of mainland Chinese bonds, all of which are troubling. Country Garden\u2019s woes have brought Chinese real estate back onto the radar of investors, adding pressure to the stock market and exacerbating declines for the<br \/>\n        Dow Jones Industrial Average<br \/>\n       and<br \/>\n        S&amp;P 500<span>.<\/span>\n      <\/p>\n<p>\u201cThe impact of Country Garden\u2019s woes is unlikely to be as severe as the fallout from Evergrande\u2019s default two years ago. Still, with the economy in worse shape now than it was then, even a smaller hit could be destabilizing,\u201d Julian Evans-Pritchard, the head of China economics at research group Capital Economics, wrote in a note.<\/p>\n<p>Moreover, woes at Country Garden and other developers increasingly look like a risk to China\u2019s financial system, including opaque shadow banking behemoths that extended credit to the real estate industry. Units of Zhongzhi Enterprise Group, one of China\u2019s largest asset managers, reportedly missed interest payments last week, with Reuters reporting that it told investors it faces a liquidity crisis and must restructure its debt.<\/p>\n<p>\u201c[Zhonghzi] acknowledged that it was in a liquidity crisis and took the first steps toward a restructuring. This highlights the growing pressure on non-bank financial institutions (NBFIs), many of which are suffering from losses on their investments in the property sector,\u201d said Evans-Pritchard. While \u201cshadow banks are getting squeezed,\u201d the economist added, \u201cthey aren\u2019t as big a systemic threat as some fear.\u201d<\/p>\n<p>Nevertheless, with Hong Kong\u2019s<br \/>\n        Hang Seng Index<br \/>\n      \u00a0now in a bear market and the S&amp;P 500 set for a third straight week of declines\u2014largely due to China fears\u2014investors will have to work hard to shake off their worries.<\/p>\n<p>Write to Jack Denton at jack.denton@barrons.com<\/p>\n<\/p><\/div>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.marketwatch.com\/articles\/evergrande-bankruptcy-china-property-261dd147?mod=markets\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Evergrande has filed for bankruptcy protection in the U.S. nearly two years after its descent into distress triggered a crisis across China\u2019s property sector. More risks, beyond developers, are brewing in the world\u2019s second-largest economy. Evergrande filed for Chapter 15 bankruptcy protection in Manhattan on Thursday \u2013 a symbol of China\u2019s sprawling and indebted real [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":50069,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-50068","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Evergrande Files for U.S. Bankruptcy as China Crisis Deepens. 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