Evergrande's whopping $81 billion loss is almost triple Iceland's GDP - it's a reflection of China's deepening property crisis.
The Chinese developer hit the headlines back in 2021 when it defaulted on its debt — an event that reverberated through global markets and have had wide-ranging effects on the Asian nation's property sector. Mass defaults and abandoned projects have become a headwind for China's struggling economy – other big developers such as Sunac and Kaisa have also missed debt payments.
Wall Street banks have warned that the real-estate industry could remain a drag on the world's second-largest economy for years to come. "We see persistent weaknesses in the property sector, mainly related to lower-tier cities and private developer financing, and believe there appears to be no quick fix for them," Goldman Sachs economists wrote in a research note last month,"We only assume an 'L-shaped' recovery in the property sector in coming years," they said, per the outlet.
Disappointing economic figures have led analysts to predict a fiscal stimulus package to reignite growth, but no intervention measures have been announced just yet.
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