What happened so that Evergrande is on the verge of collapse due to a debt equivalent to 2% of the country’s GDP?. For some analysts, the critical situation facing China Evergrande Group is due to several factors, including:
*Contraction in the sales of a large part of its real estate projects.
*The company has adopted the strategy of selling its properties at a discount of up to 30% to increase its cash flow and thus be able to meet its commitments.
*The scale of Evergrande’s ambitions was staggering. The group resorted to loans, not only for its real estate portfolio but also to enter the business of manufacturing electric vehicles, sports and theme parks, food and beverage business. Furthermore, in 2010 they bought a soccer team, which is now known as Guangzhou Evergrande.