Agency: Global markets weeks ago were fretting over the possible failure of China Evergrande Group, the property developer, as it grapples with $300 billion of unpaid debts. A broader panic contributed to a wave of defaults among Chinese developers. Property value is still falling, and sales are plummeting.
But the developer says the worst is over, and the Chinese authorities say the risks are manageable even as other companies show signs of trouble. Evergrande and Beijing are managing the company’s struggles in secret, allowing it to meet some payment deadlines without explaining how.
The approach may stem panic, but it papers over broader pressures on the sector. “The fundamental situation for Evergrande hasn’t really changed,” Matthew Chow, a China property analyst and director at S&P Global Ratings, said. “We remain sure that default is almost a certainty.”
In flux: More than a million home buyers are waiting for unfinished apartments, and the company may owe money to just as many workers. Another deadline for Evergrande approaches on Wednesday, when the grace period on $150 million worth of bond payments will end.
