As China’s second largest real estate major Evergrande Group is crumbling, anxious investors and the business community at large are eagerly waiting to see if Beijing offers to bail out the defaulting behemoth.

The Xu Jiayun-founded Evergrande has been a symbol of China’s success and the news of it defaulting have already made thousands of home buyers in the country worried. Not just that. A failed Evergrande would have huge economic implications on several other companies that have been associated with the real estate major. Many could also be left jobless, analysts said. The company has over 1.23 lakh employees.

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“Once a symbol of glittering success in the most exciting property market on the planet, China Evergrande is now tanking, and dragging many of its competitors with it, as global investors and creditors desperately attempt to parachute out of the troubled Chinese property sector,” ABC news broadcaster said.

Now, the real problem. The Evergrande crisis brings out a more critical issue — the problem of high and unsustainable debt that several Chinese firms may be getting caught in at this juncture when the world economy is going though testing times amid the Covid 19 pandemic and shifting geopolitical contours.

Voice of America said that in both 2019 and 2020, Chinese firms defaulted on more than $20 billion in debt, and analysts believe that 2021 is on pace to set a new record.

Two analysts India Narrative spoke to, pointed out that it is not just the Chinese private sector, but questions over financial health of the government owned firms have also been raised.

About $1.3 trillion is the estimated Chinese corporate debt that would be due in 12 months.

“Debt, whether public or private, does seem to be an Achilles heel for China, and accounting practices and reporting are murky,” VOA quoted Doug Barry, a spokesperson for the U.S.-China Business Council as saying.

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The Evergrande fiasco has hit the Chinese corporate world within days of the tumbling of another company — China Huarong Asset Management.

While the Chinese state-owned firms have come to the rescue of the ailing asset management firm last month, there are no indications yet from the Chinese authorities on their plans for Evergrande, “which has been selling off assets in a rush to raise the cash needed to satisfy lenders,” as VOA pointed out.