Evergrande: The Lehman moment for China
In 2008, when Lehman declared bankruptcy after the sub-prime crisis in the US, shockwaves were felt worldwide.
In 2008, when Lehman Brothers declared bankruptcy due to the subprime mortgage crisis in the United States, shock waves were felt around the world. Now, the world is drawing parallels between the Lehman bankruptcy and an impending default by Evergrande. The world economies should brace up for one more economic disaster, only this time it’s by China.
This Lehman moment of China reminds me of IL&FS. But due to the swift action of the Indian government, no such crisis took place. The government-appointed board has been able to recover around 61% at IL&FS. The situation in the case of Evergrande is totally different and if not taken care of, ripples will be felt everywhere.
The images of hundreds of employees with boxes in hand leaving Lehman Brothers headquarters in New York City after the company filed for bankruptcy on September 15, 2008 became one of the lasting images of the global financial crisis. This became the perfect example of how a leading firm can come to ruin, dragging a nation and the world with it.
What is Evergrande?
Evergrande is one of the largest real estate development companies in China, founded in Guangzhou in 1996. It specializes in…
