Several reports say that the major Chinese real estate developer Evergrande’s downfall triggered a bank run in northern China last week. The bank run began after rumors spread that the financial institution, Bank of Cangzhou, allegedly loaned billions to the struggling company. This development came on the heels of an Evergrande announcement about the detention of its founder, Xu Jiayin.
Evergrande’s Crisis Spills Over, Sparks Bank Run in China’s Cangzhou Prefecture
Evergrande, the Chinese real estate giant, filed for Chapter 15 bankruptcy protection in a New York court on Aug. 18, 2023. The company expanded quickly during China’s real estate boom and was once among China’s top real estate developers.
However, its aggressive growth was financed by significant debt, and by 2021, it amassed more than $300 billion in debt and liabilities. Before its fall, concerns about significant financial fallout resonated both in China and globally.
The implosion of Evergrande isn’t just a
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