Evergrande's US bankruptcy serves as a cautionary tale about the growth-at-all-costs model that underpinned China's spectacular growth over the past 30 years.
For decades, Evergrande, once one of China's most successful real estate developers, gobbled up debt as China's economy exploded. Demand for housing was so strong, homebuilders often pre-sold apartment units to buyers before construction was complete.
It defaulted in December 2021, triggering a market panic. A wave of defaults followed, and China's vast real estate market has yet to recover. Building was suspended on dozens of projects, leaving many "pre-sale" buyers left with no new home and a hefty debt burden. The China Evergrande Group logo displayed atop the company's headquarters in Shenzhen, China, on Thursday, Sept. 30, 2021.Evergrande's liquidity crisis was just the beginning of the pain. Other large builders in China have since defaulted as they struggle to to shore up cash and demand for housing has fallen.
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