Evergrande’s downfall threw China’s real estate market in a crisis. Can India escape such a reality?
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Police officers look at people gathering at the Evergrande headquarters in Shenzhen, southeastern China on September 16, 2021, as the Chinese property giant said it is facing "unprecedented difficulties" but denied rumours that it is about to go under.
Synopsis
When there was less housing and rising GDP, the realty sector boomed in China. Banks, bondholders, and homebuyers, provided the much-needed capital for building more houses. As China tightened screws on overleveraged firms, developers started to default on debt payment and left homebuyers with unfinished houses. Can India, wiser from Jaypee and Unitech episodes, avoid the pitfalls?
Hui Ka Yan, the founder of China Evergrande Group — one of the largest and among the most indebted real-estate companies in the world — has been detained for “illegal crimes”. Ka Yan now belongs to the infamous list of Chinese entrepreneurs, who are either arrested or investigated under the regime of Xi Jinping. While being accused for “illegal crimes” is a vague charge, the story of rise and fall of China Evergrande is one that will resonate
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