What is China’s Evergrande Group and Why Is It In Trouble?

A stock which has been circulating the news frequently is the China Evergrande Group. Once the largest developer in China, now it is defaulting on its debt and is having big effects on the country’s economy.

In the last year, 75% of the group’s value has evaporated, and the group still owes over 300 billion. Three-hundred billion dollars! The situation is so dire that they can’t even pay their current interest payments, 84 million of which is due on Monday (20th of Sept). Meanwhile, 1.5 million homebuyers have no homes to move into.

As this company is China’s epitome of the “too big to fail”, a controlled collapse seems necessary. Shares in the past month have fell 51.62 percent, with this week being particularly dire with the firm dropping 28.25 percent of its share value. The Evergrande groups downfall could have major effects on the Chinese Economy. So watch this space.