The turnover of Chinese real estate developers collapsed in September due to the crisis at Evergrande. That faltering Chinese real estate group missed debt payments and could no longer pay suppliers.
Evergrande is heavily indebted. There are fears of a knock-on effect from bankruptcies if the company goes bankrupt.
Major Chinese developers saw their revenue drop 36 percent year-on-year last month. The downward trend already started in July.
US Secretary of State Antony Blinken has urged China to deal “responsibly” with the crisis at Evergrande. But, according to him, it could also have far-reaching consequences for the rest of the world. This increases the pressure on the Chinese government to come up with a solution.
Earlier this week, it was announced that other companies in the Chinese real estate sector are also struggling with debt problems. For example, real estate developers Fantasia Holdings and Sinic missed debt payment deadlines.
At Evergrande, a deal is likely in the works to raise capital. According to Chinese media, industry partner Hopson Development wants to take a 51 percent stake in the company’s real estate branch for 4.3 billion euros.