International
23:13 11 October 2021
Post by: WBJ

The largest developer in the world has $300 bln in debt

The largest developer in the world has $300 bln in debt
Source: Photo by Sean Lim on Unsplash

Evergrande, the largest developer in the world, did not pay interest on its loans on time. The company failed to pay $83 million in bond interest. The Polish Economic Institute, a public economic think tank, analyzed how the problems of Chinese developers may affect international trade.

The company has a total debt of $300 billion. For comparison, Poland's public debt at the end of 2020 amounted to approximately $360 billion.

The collapse of Evergrande, coupled with the Chinese Communist Party's efforts to curb housing price growth, could translate into a downturn in the construction sector. Given the importance of Chinese construction, worth even 15-25 percent of Chinese GDP, this may negatively affect international trade, especially in raw materials.

If the problems in China's construction sector continue to worsen and slow down the Chinese economy, it will negatively affect international trade. Such a downturn would translate into lower demand for goods and services imported to China. The largest exporters of construction raw materials - Australia and Guinea - will experience direct negative effects. The actions of the Chinese authorities, which will not allow the wave of bankruptcy to spread, may protect against the worst-case scenario.

(300gospodarka

australia
china
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world
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