China, Evergrande crisis. The US think tank: long wave will also reach Italy

The Chinese real estate crisis shakes the world economy. Giant China Evergrande filed for a “protected bankruptcy” procedure, i.e. a debt restructuring. The objective is to make the assets that the company has in the States unassailable, since the mountain of accumulated debts is frightening. We are talking about more than 330 billion dollars. The Shenzhen-based group issued a statement saying the “application is a normal offshore debt restructuring procedure and does not involve filing for bankruptcy”. However, the alarm goes off for markets all over the planet: “The problems are structural, the government tried many times to correct the bubble without success. of the Center for Strategic and International Studies (Csis).

The tribulations of the real estate sector in China were the object of analysis by the North American think tank. “The pressure never went away. There are structural problems that have not been resolved and are getting worse. We are witnessing a necessary readjustment in the real estate market. Necessary, but certainly painful, above all because it will directly affect many families “. Mazzocco explained. Asked whether these difficulties were foreseeable, the senior fellow replied: “The government has known about the problem for years and has tried several times to correct the housing bubble. In fact, it was the government’s own measures that made the situation worse.” accelerating the crisis when attempts were made to cut speculation”.

What are the consequences of the Dragon’s moves? “The result was that many companies ran out of cash and demand dropped, leading to a drop in prices and leaving many projects unfinished. In many cases, there are people who paid upfront for apartments that will never be built.” According to Mazzocco, the Evergrande crack will have worldwide implications. “The growth of the Chinese economy has relied heavily on the real estate sector over the past decade and is now having a negative impact on the entire economy. Furthermore, a large proportion of Chinese household savings are invested in real estate. As real estate prices plummet and disinflation, this could lead to sudden impoverishment for many. There are other problems in China’s economy now, just think that now the US economy is growing faster than China’s,” added the Fellow. csis. What, then, are the likely scenarios. Mazzocco has no doubts: “If China fails as a world engine, it could certainly have negative effects for the rest of the world”.