According to the EpochTimes commentator Li Muyang, on Dec. 3, China’s Evergrande Group announced it had defaulted on a debt of up to $260 million. This announcement by Evergrande may result in Evergrande’s bankruptcy. The impact of this incident will be huge.
However, a spokesman for the China Banking and Insurance Regulatory Commission said the Evergrande issue would not negatively impact the banking and insurance industry’s operations.
When Evergrande collapses, any of its industries will be affected. In particular, Evergrande itself also has banking and insurance businesses, owning Evergrande Life Insurance and Shengjing Bank. Among them, the total assets of Evergrande Life exceeded $230 billion.
In 2016, Evergrande also held 36.4% shares of Shengjing Bank and was the largest shareholder of Shengjing Bank.
The predecessor of Shengjing Bank was Shenyang Commercial Bank, with 18 branches in Shenyang Beijing, Shanghai Tianjin, Changchun Dalian, and other major cities. Will these banks not be affected?
It’s hard to say precisely what impact the financial system will have, whether there will be banks and insurance companies’ failures along with it. Or even a financial crisis or not.
But the impact will soon be apparent. Of course, the Chinese people are the biggest victims of Evergrande’s expected bankruptcy.
People who have purchased Evergrande financial products will face losing all their money no matter how much they put in. Because the CCP did not return the funds to Evergrande, it never seriously took people’s interests to heart.
Of course, people have held up a few banners to protect their rights at the gate of the CCP government. But they were all violently suppressed, and a handful of civilians died.
Evergrande is the largest real estate developer in China and has a massive industry under its umbrella.
Evergrande also owns Evergrande Real Estate, Evergrande New Energy Vehicle, Evergrande Property, RV Bao, Evergrande Children’s World, Evergrande Bingquan, and more.
These companies under Evergrande have strong ties to the banking and insurance industries.