Global financial crash fears as China steps in to take over Evergrande’s football stadium

China 'attempting to become colonial power' says Damian Green

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Chinese authorities have been forced to take over the Evergrande Guangzhou Football Stadium due to the company’s financial woes. The football stadium remains under construction after the project was suspended three months ago. The Chinese government will now look to sell the stadium or transfer ownership to the state firm Guangzhou City Construction Investment Group, Reuters reports.

The stadium had an estimated cost of $1.7billion (£1.2billion) and had been due for completion in 2022.

Evergrande faces debt worth £221billion and has allegedly missed several bond interest repayments to foreign investors.

Although the company is one of the largest real estate organisations in China, new laws introduced surrounding the amount of debt a company can take on, have put Evergrande’s future at risk.

Property sales have plummeted while Evergrande was forced to sell-off its projects at major discounts due to the new regulations which were introduced last year.

Dr Marco Metzler from Deutsche Marktscreening Agentur (DMSA), said the company has missed interest repayments of up to £110million.

The company faces further interest repayment of $255.2million (£191million) and $117.5million (£88million) on December 28 and January 2022.

Although it has seemingly managed to survive despite missing these grace period deadlines, Dr Metzler claimed the company’s collapse is the first domino in the meltdown of the financial market.

He told Express.co.uk: “This is the first domino of the collapse of the market.

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“It will be even worse than the 2008 financial crash.

“The market is bigger than what the US was.

“Plus, the supply chains aren’t working and there is inflation.

“If the market doesn’t crash, we will have hyperinflation and that will have the same effect on the economy.

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“People say you can kick the can down the road but we’re at the end of the line.

“It’s a matter of time, we have high inflation and low interest.

“Inflation driven by lack of goods and China has an energy problem.”

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The property market in China is worth an estimated $55trillion (£40trillion) and accounts for 29 percent of China’s GDP.

If such a large company in such a large market were to collapse, there are fears it could spook lenders across the global financial system.

If lenders were to doubt the ability of companies to repay debts, it could spark a credit crunch across the financial system.

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