Chinese Checkers
India Legal|October 4, 2021
Evergrande, with a debt burden of around $ 300 billion, is the world’s most indebted real estate developer, and its position has sent shivers down the spine of the world’s financial markets
Sujit Bhar

THE Covid-19 pandemic will feel like a mild shiver down the spine of the world’s financial markets if China’s second-largest real estate developer Ever grande defaults. This will be comparable to the subprime disaster of 2007-08.

Evergrande, with a debt burden of around $300 billion, is the world’s most indebted real estate developer, and IL&FS, India’s real estate financier NBFC that collapsed, is not even a baby compared to that—IL&FS had combined debt of around Rs 1 trillion.

The problem is bigger than the debt, though. It is being said that China’s authoritative Communist regime may not be in any mood to rescue the company, just wanting to let it die. This is going by President Xi Jinping’s mood as seen in dealings with Chinese tech giants, such as Alibaba and edutech companies in the recent past.

That won’t be a peaceful death. While the Chinese real estate sector will take a massive hit, the bigger scare is that banks the world over will be the most affected. This could be a contagion of Biblical proportions and fingers remain crossed across all boards.

How will it affect India? Devina Mehra, the super stock analyst in the India’s stock scenario, does not seem too worried. In a recent interview to Moneycontrol.com, she has said: “In our view, the issue is part of a deliberate move by the Chinese government to let a few businesses fail, to rein in a bigger problem. So, they will not let it go out of hand. The situation is similar to a ‘controlled detonation’. In a relatively controlled economy like China, this is entirely possible. This is in contrast to several somewhat sensational reports and videos floating around.” She may be right, and to bolster her argument she also says that, overall, the exposure of Indian stock investors to the Chinese real estate sector and to Chinese banks is at a controllable 2.3 percent. Add to that the fact that Indian exposure to European banks is also pretty low.

However, a contagion—if that happens—is all-engulfing, multifaceted. Here is a problem. European banks’ exposure to India could be as high as 14-15 per cent of the gross domestic product (GDP). This, in absolute terms, is approximately $220-225 billion.

Continue reading your story on the app

Continue reading your story in the magazine

MORE STORIES FROM INDIA LEGALView All

Modi Versus Modi

Businessman and former IPL head Lalit Modi’s mother Bina Modi, his sister Charu and brother Samir have filed a suit seeking to restrain the arbitration proceedings initiated by London-based Lait Modi in Singapore over property disputes in the family. The apex court may have found a way to ease the way for a settlement

5 mins read
India Legal
December 27, 2021

Child Marriage Bill - 2022 And Patriarchy Lives On…

Raising the marriage age of women from 18 to 21 years has its drawbacks. In reality what is needed is their economic and health empowerment and achieving sustainable development goals

8 mins read
India Legal
January 17, 2022

Consent is Supreme

The Aurangabad bench of the Bombay High Court recently held in a case that touching the feet of a woman by a stranger without her consent amounts to outraging her modesty under the Section

5 mins read
India Legal
January 17, 2022

Long Wait for Justice

The High Court’s order of acquittal of a murder convict comes 38 years after the incident took place. During the lengthy pendency of the case, five other accused who had also filed an appeal died. The abnormally lengthy timeline reflects the intricacies of the judicial system

4 mins read
India Legal
January 17, 2022

Not a Foolproof System

The new Election Laws (Amendment) Bill, 2021 proposes to link electoral rolls with Aadhaar to curb multiple enrolments of the same person at different places. But it also runs the risk of identity theft

4 mins read
India Legal
January 17, 2022

Stick to the Brief

A judge created a stir recently by making unnecessary remarks in a bail order. These go against the principles of judicial discipline and secular ethos. A judge is supposed to go by facts and laws

4 mins read
India Legal
January 17, 2022

The Curse Of Human Trafficking

The draft Bill, to be presented in Parliament soon, has brought a ray of hope to all those who have suffered due to various lacuna in the legislation owing to which trafficking in persons,especially women and children, has reached an all-time high

4 mins read
India Legal
December 27, 2021

A Short, But Urgent Constitutional Message

In a welcome development, the Supreme Court advised the political class to be more tolerant of each other’s opinion and said that the debasement in dialogue had become the chief problem of democracy

5 mins read
India Legal
December 27, 2021

How Twitter Protects VIPs

Prime Minister Narendra Modi’s twitter account was briefly hacked but restored almost immediately. A recent investigation by Bloomberg, the US-based financial services company reveals that Twitter has a project that protects VIPs and their accounts

3 mins read
India Legal
December 27, 2021

Teach the Children Well

As schools reopen, a lot will depend on teachers to ensure that students will be able to continue their education in a safe and healthy environment and make up for knowledge and skills that may have been lost due to the pandemic

5 mins read
India Legal
December 27, 2021
RELATED STORIES

Wall Street Digs In To China

U.S. politicians are taking a tougher line on the country, but bankers say they have to be there

5 mins read
Bloomberg Businessweek
January 10, 2022

THE ANIMAL-HUMAN CONFLICT

RAJESH MENON is a wildlife photographer and environmental conservationist living in North India. Here he shares some ideas for solutions to the animalhuman conflicts that are apparent in all regions of the world today.

4 mins read
Heartfulness eMagazine
January 2022

Passion and Love for Community

Dr. Prakash Tyagi is the executive director of Gramin Vikas Vigyan Samiti (GRAVIS), an NGO dedicated to working in impoverished rural regions of India, including the Thar desert, Rajasthan, Uttarakhand, and Bundelkhand. In part 2 of this interview with Kashish Kalwani, he speaks about how things have changed due to the pandemic and the importance of passion and love for community.

3 mins read
Heartfulness eMagazine
January 2022

Modern Vinyasa FOR THE MASSES

Teacher Calvin Corzine brings a functional yet challenging approach to yoga with an emphasis on making everyday movement easier.

7 mins read
Yoga Journal
January - February 2022

CHINA'S QUEST TO TAKE TAIWAN

CHINESE OFFICIALS HAVE started directing citizens to stock up on food amid rising vegetable, egg, and pork prices. Encouraging people to become preppers could just be how the Chinese government expresses concern about cold snaps and potential future COVID-19 lockdowns. But some fear it’s a more sinister sign, indicating that the Chinese Communist Party (CCP) wants people to prepare for the growing threat of war.

3 mins read
Reason magazine
February 2022

India Is on a Tear

Massive modernization presents opportunities for investors.

5 mins read
Kiplinger's Personal Finance
February 2022

The Jail Money Trap

The Museum of Chinese in America was desperate to buy its building. The city found a reason to pay for it— one that threw Chinatown into a years-long fight.

10+ mins read
New York magazine
December 20, 2021 - January 02, 2022

Tesla Takes Its Critics to Court

Chinese customers and bloggers who complain about its cars are increasingly the targets of lawsuits

5 mins read
Bloomberg Businessweek
December 20, 2021

Love, Non-violence, and Truth

DR. PRAKASH TYAGI is the Executive Director of Gramin Vikas Vigyan Samiti (GRAVIS), an NGO dedicated to working in impoverished rural regions of India, including the Thar Desert, Rajasthan, Uttarakhand, and Bundelkhand. In part 1 of this interview with KASHISH KALWANI, he speaks about applying the Gandhian principles of love, non-violence, and truth to support communities in need.

6 mins read
Heartfulness eMagazine
December 2021

WISDOM FROM MY FATHER

The tempo 1 was ready to depart. It was a short 30-minute journey from Bhatkal to Uppunda, a sleepy village in coastal Karnataka, India. My father, sister, and I were traveling together.

4 mins read
Heartfulness eMagazine
December 2021