Global bubble BURSTS: Evergrande set for collapse causing ‘great reset’ worse than 2008 | City & Business | Finance
China Evergrande stands at £221 billion in debt, and an expert has claimed the company’s collapse could cause the financial system to fall. Speaking to Express.co.uk, Dr. Marco Metzler of Deutsche Marktscreening Agentur (DMSA), that the collapse of the Evergrande is the first domino in the eventual destruction of the global financial system. Due to the size of the real estate market, estimated at $55 trillion (£40 trillion), he claimed that the collapse of the Chinese real estate market will cause a bigger financial collapse than what was seen in 2008.
The real estate market, including construction and real estate-related goods and services, totals 29 percent of China’s GDP.
Dr Metzler said: “This is the first domino of the market collapse.”
He added: “It will be worse than the 2008 financial crash.
“The market is bigger than what the US was.
“In addition, the supply chains are not working and there is inflation.
“If the market doesn’t crash, we’ll have hyperinflation and that will have the same effect on the economy.”
China Evergrande is one of the largest companies in the world and one of the largest in the country’s real estate market.
Due to increased restrictions on foreign borrowing, Evergrande has faced several bond interest repayments.
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He also claimed that the Chinese economy is now heading for a recession.
He added: “People say you can kick the can on the road, but we’re at the end of the line.
“It’s only a matter of time, we have high inflation and low interest rates.
“Inflation driven by lack of goods and China has an energy problem.
“It’s even worse than in 2008.”
There is fear about the financial market, as if such a large company went bankrupt, it could scare off lenders around the world.